In a week replete with chaotic movements and arrangements, a puzzle has emerged. Conventional wisdom says that when stocks tank bonds rally. While the latter takes place regardless of the former, during those times when the NYSE finally pays attention to what might be herding financial agents into safety instruments the bond market typically rallies even harder. It sure did [...]
Jay Powell has a lot of catching up to do, and very little time to do it. He's squandered so much already. First his emergency rate cut blew up in his face and now his dud of a bazooka. Before the market got going, officials had already added a 25-day allotment (of bank reserves, of course) on top of the [...]
The 3-month Treasury bill’s equivalent yield has plunged, absolutely plunged. It was 1.45% last Thursday. Today? All of 45 bps. A one-hundred bp drop in six trading sessions. One hundred. Six days. Rate cuts, right? Sure, that’s the premise. Like eurodollar futures, the front end of the yield curve is saying that there are more of them coming. The Fed’s [...]
Unlike the headline Establishment Survey, the rest of the economic data isn’t surging like it’s 2014 all over again. On the same day the BLS issues the next blowout payroll report, the Census Bureau suggests instead US demand, at least for goods produced overseas, continues to decline at a precipitous pace. Seasonally-adjusted, there had been something of a rebound in [...]
Being a member of the institutional “elite” means never having to say you’re sorry; or even admit that you have no idea what you are doing. For Christine Lagarde, Mario Draghi’s retirement from the European Central Bank could not have come at a more opportune moment. Fresh off the Argentina debacle, she failed herself upward to an even better gig. [...]
What’s going on in China? It’s a question that is on everyone’s mind. While most attention is focused on the unfolding human tragedy of the COVID-19 pandemic, the potential for it to be compounded by any economic fallout makes for even more urgency. The sad truth is that China was in rough shape heading into the coronavirus. How rough, though? [...]
I actually wanted to focus on this yesterday but confirmation wasn’t forthcoming until today. So, it ended up being a broader note on the dollar which only included some mention of Brazil in passing. Still a worthwhile couple of minutes. There were rumors that Banco (central) do Brasil was intervening or was going to intervene in its local currency markets, [...]
Back last June, the dollar had broken its upswing. DXY, one major dollar index, had fallen sharply as had most if not all of the rest. This one had given up most of its “gains” in a relatively short period. That said, to some, the greenback had definitely hit its high. All downhill from there. It didn’t help, supposedly, that [...]
The world has a big dollar problem on its hands. That’s not a statement which will surprise any of you who have been readers here for any length of time. Nor would it amaze you if I also said the world has a massive shadow dollar shortage. The kind of dollars more attuned to bank footnotes than any of the [...]
We knew German Industrial Production for December 2019 was going to be ugly given what deStatis had reported for factory orders yesterday. In all likelihood, Germany’s industrial economy ended last year sinking and maybe too quickly. What was actually reported, however, exceeded every pessimistic guess and expectation – by a lot. IP absolutely plummeted in the final month of 2019. [...]
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