While the outward-facing pieces of the eurodollar puzzle show a little bit of Greek reference, the inward parts seem much more defined by the systemic erosion in liquidity and capacity quite apart from all that. LIBOR and other money rates continue to rise, as do risk spreads. Since the QE system was laid out roughly on liquidity as function, the [...]
There have been, in the past year, two great inflections in wholesale finance. The first was in late June as the “dollar” began to rise, thus signaling a massive shift in balance sheet mechanics, the modern “money supply” that so confuses economists. That is why they at first enthusiastically embraced the “strong dollar” as that anachronistic interpretation seemed on the [...]
Repo rates ticked up again today as both agency and MBS GC rates remain over 20 bps. Volume has picked up also more recently, which may suggest more benign conditions overall the past almost two months are running their full course. Ever since May 1, volume in all three classes has been significantly greater than their drawn out averages, with [...]
As the “dollar” has taken back some of its pressure we are seeing at least some of the effects of that in various credit and funding markets. There can be no doubt now that the March 18, 2015, FOMC decision to at least position more “dovish” removed a great deal of “dollar” stress from the global network. To that end, [...]
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