We ended last week with a clear sign that global “dollars” are in (escalating) shortage. I would write “again” with that sentence but there is every indication that said shortage never really ended. It’s not like last year’s “reflation” was a switch from insufficient supply to sufficient, rather it was a relative change to a degree that isn’t easily established [...]
Back in early October, I noted that repo fails had jumped above $250 billion (combined “to receive” and “to deliver”) for three weeks straight. That wasn’t an auspicious result, as sustained collateral problems like that don’t correlate to happy things. It all began the week of September 5, in what seemed like a minor one-day nuisance over the 4-week bill [...]
The Chinese have been on a UST buying spree of late, having announced to the world several months into it that they were intent on keeping it going. The idea in publicly endorsing and really highlighting their official activity was as a currency policy – to stabilize CNY against its highly disruptive tendency toward devaluation (which isn’t really devaluation). How [...]
The Treasury International Capital (TIC) report produced somewhat of an anomaly in its update for August 2017. There was a lot going on during that month, mostly as UST yields fell (even though interest rates have nowhere to go but up, supposedly) while CNY continued its blistering ascent. As to the latter, it was quite clear by then Chinese actions [...]
Five days ago, the Bank for International Settlements (BIS) published its Quarterly Review letter. Contained within it were the usual articles and releases of data that accompany every issue. There was the opening piece encouraged, as always, by the “strong outlook” though puzzled how it isn’t translating into inflation. And bowing to the enthusiasm and interest in things like Bitcoins, [...]
On December 3, 1999, Enron Communications announced that the company had begun operations selling bandwidth as an energy commodity. After publicizing the venture in May that year, it seemed natural given that they had been selling similar products in the energy sector, pioneering all sorts of products along the way. As the internet matured there was no way Enron would [...]
What is about math that makes us feel comforted? Numbers are objective, of course, but the using of numbers is not. Even in the hard sciences calculations are not strictly calculations for their own sake, they are interpreted and therefore given subjective meaning. I don’t intend to detour this argument into a teleological one, but in some ways that just [...]
The advance estimate for GDP is scheduled for release tomorrow, and by current estimates it should be a total washout. Yet another first quarter is expected to be a disaster, the fourth in a row and the third straight under the “residual seasonality” regime that was supposed to reveal the hidden economic strength obscured by recent winters. Unlike 2014, however, [...]
We are at the stage ten years later where it is still necessary to define terms. In every finance and economics textbook, the chapter on monetary policy defines “tight” money as when the Federal Reserve (or whatever central bank) raises its policy rate(s). Conversely, “accommodative” money is where it lowers the rate(s). In the US system, the technical reason given [...]
The fact that China reported a small increase in official “reserves” for February 2017 is one of the least surprising results in all of finance. The gamma of those reserves is as predictable as the ticking clock of CNY, in no small part because what is behind the changes in those balances are the gears that lie behind face of [...]
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