It was said to be something hugely significant, truly momentous - but only until it started to misbehave all over again. This was the summer of 2013, SHIBOR Summer in China and the misunderstood, mislabeled “taper tantrum” in the US$. Consistent with the latter’s more optimistic take on the world, the 30-year swap spread turned positive for the first time [...]
Eurodollar, not Evergrande. That wasn’t just the point of yesterday’s recall, it is the whole point of beyond fourteen years of going only the wrong way. The deflationary way. Defaults in China are nowadays a commonplace part of that trend, one which began early in 2014 with Shanghai Chaori Solar.What was significant about Chaori was this: “It was the moment [...]
The first seeds of the eventual eurodollar bloom, in domestic US terms, were sown all way back in sixteen – as in the year 1916. Believe it or not, the Federal Reserve Act, then only a few years old, had been modified so that banking syndicates (those able to raise the princely sum of $1 million capital) could form what [...]
The dollar stopped falling on January 6, beginning a reversal which has lasted more than eight months. This forewarning was joined two days later when TIPS breakevens crossed, inverting the 5-year when compared to the 10-year. About a week after that, T-bills.In other words, as I had written up last week, there actually were quite a few contrary indications in [...]
We are going to start here with Europe before heading to Australia and then getting to China – and then currency. Why the ECB? It is going through the same pangs of dissatisfaction as its cousin the Federal Reserve had last summer. Like the Fed in 2020, Europe’s central bank in 2021 has climbed to the end of its grand [...]
Copper, like lumber, had been the star of the space. Each had rocketed upward beginning last fall representing, for many, the leading edge of the inflationary wave sure to follow. The two garnered that much attention as well as given this much importance because the rest of the commodity class hadn’t really come close to matching their meteoric scale.It was [...]
The Treasury Department’s TIC update for the month of June 2021 was, well, interesting. Not in a good way, either (post-2014, is it ever actually good?) There are just too many nuggets to digest in one sitting, so here I’ll merely go over three major developments: an update to the May 2021 big dollar warning; a big, nasty wince given [...]
Whomever actually coined the term “taper”, using it in the context of Federal Reserve QE for the first time, it wasn’t actually Ben Bernanke. On May 22, 2013, the central bank’s Chairman sat in front of Congressman Kevin Brady and used the phrase “step down in our pace of purchases.” No good, at least from the perspective of a media-driven [...]
Money printing. Overheating. Going from an economy stuck in the mud to one rocketing ahead seemingly in the blink of an eye. Careless government officials steadfastly forecasting Goldilocks, surely whistling past the consumer price graveyard of stagflation misery.Long believed dead, that seventies Inflation Monster relit maybe by necessity but now on the loose lurking just beneath the surface, ready to [...]
Economic relativity. One datapoint or economic circumstance may be said to be good, maybe great, in relation to another, but if the second isn’t really all that good maybe the first is just better than bad. Terms like “strong” and especially “recovery” should have more rigid definitions and be judged by more complete standards. If you are looking for a [...]
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