TIC data confirms that “reflation” captured more than just pricing sentiment. It appears to have occurred in bank balance sheet activity, and related official sector UST transactions. As to the latter, official holdings of US$ assets did decline on net in March 2017, the latest figures, including more selling of UST’s. The scale of the decline was less than we [...]
Progressive New York Magazine columnist Jonathan Chait writing for the leftist New Republic in 2010 prophesied that if the Republicans took Congress that year and Obama won a second term two years after, “the House will vote to impeach him before he leaves office.” He was confident enough to make such a prediction because that is post-Nixon politics; they got [...]
Earlier this month, China’s State Administration of Foreign Exchange (SAFE) reported a large increase in official reserve holdings. The biggest “inflows” in several years has, as you would expect, led to much optimistic commentary suggesting if not outright stating that the currency problems are no more. It is not the first time such claims have been made, as this has [...]
Unemployment in Brazil typically rises at the start of each year, a ritual accepted in that part of South America in a way that it isn’t here (residual seasonality). In 2013, for example, from December 2012 through March the rate rose by 1.1 percentage points. The following year, from December through March, it increased by 1 percentage point. This year, [...]
China’s trade statistics for April 2017 uniformly disappointed. They only did so, however, because expectations are being calibrated as if the current economy is actually different. It is instead merely swinging between bouts of contraction and low-grade growth, but so low-grade it really doesn’t qualify as growth. Positive numbers do get the mind racing, but since the end of 2011 [...]
I don’t think Milton Friedman would have made much of chess player. For all I know he might have been a grand master or something close to that rank, but as much as his work is admirable it invites too the whole range of opposite emotion. He was the champion libertarian of the free market who rescued economics from the [...]
Back when the WTI curve was at its steepest contango, who was it that was buying up all that oil? A sheer vertical curve is an invitation to almost free money, very much like other curves everywhere else during the “rising dollar.” You could simultaneously buy crude at spot and sell it for delivery years ahead using a futures contract, [...]
Closing the book on Q4 2016 balance sheet capacity is to review essentially forex volumes. The eurodollar system over the last ten years has turned far more in this direction in addition to it becoming more Asian/Japanese. In fact, the two really go hand in hand given the native situation of Japanese banks. As expected, data compiled by the Office [...]
Part 1 is here. The story of the asset bubbles is one of eurodollars alone. We can tell so much of the history of the past few decades by examining its pieces. The primary component has been derivatives, these financial instruments that are largely misunderstood shrouded often by what can appear to be incomprehensible complexity. That their own purveyors more [...]
You could say that SunTrust dodged a bullet. The Georgia bank was itself an amalgam of smaller banks cobbled together during the deregulation of the 1980’s. On the one side were the Florida subsidiaries based in Orlando, what came to be known as the Sun Bank. On the other was the Trust Company of Georgia, both coming together in 1985 [...]
Stay In Touch