Well, it's that time of year again, when all the pundits offer their crystal ball views of the coming new year. I don't usually participate in the prediction game and this year won't be any different. Like everyone else I wonder what the future holds but I know I have no special ability to predict how it might unfold. What [...]
The growing sense of an economic cliff is based on three major factors, all of them in massive markets as opposed to manipulated and ill-suited statistics. The most obvious are oil prices and the UST curve (and related curve mechanics) as they have turned to prices and shapes not seen since the worst of the last crisis. The third, “dollar” [...]
co·nun·drum - noun: A confusing or difficult problem; a question or problem having only a conjectural answer Merriam-Webster Back in the last Fed tightening cycle, Alan Greenspan described the refusal of long term rates to follow short rates higher a conundrum, something he couldn't really explain. Unlike past periods of tightening, long term rates refused to budge higher as the [...]
As the “dollar” runs somewhat “tighter” again, it is not surprising to see the various global dollar short proxies struggle under the weight of what I think is a very serious transition. The Brazilian real and gold are related in that respect, so lower prices in each are intertwined and significant toward that interpretation. However, the severity of the real’s recent [...]
It began more than a week before the FOMC meeting, as eurodollars again anticipated what the mood would be surrounding whatever the FOMC might say. “Dollar” conditions had run down significantly where the entire curve shifted lower (looser) for the first two weeks of October as doubts grew about the economy in the US and pretty much everywhere else. Right [...]
The problem with being long gold, or even a fan of gold as anathema to central bank “flexibility” in central planning, is that you are often reminded the messiness of its modern nature. Gold as money, properly understood, meant money as property which is why physical metal fit so well for maybe all of “civilized” human history. However, the unassailable [...]
Last week was pretty much a disaster, not just economically speaking, for a wide swath of the globe – from Japan’s ongoing "unexpected" collapse to Europe’s "unexpected" third go at contraction (without recovery) to a very dim and "unexpected" view of credit markets pretty much everywhere including the US. This week started out with more grimness, in places like China [...]
There is a growing bid for safety in almost every corner of the globe at this moment, save for a few outliers. Even the 10-year JGP sits at 50 bps today despite the spike in consumer inflation engineered by the Bank of Japan’s QQE. Of course, with BoJ buying up almost everything in sight, that may not be a relevant [...]
It is hard to believe that this past weekend marked the seventh anniversary of the paradigm shift in global financial function. Everything that has occurred in the years since can be traced to those days in August 2007 when money markets broke down for the first time. Even the current, though measured, move away from the US dollar in global [...]
It may have been something like two years, maybe closer to eighteen months, but it seems just like yesterday that Europe had left its deficient construct in the past. It was a daily ritual back then, exercising due diligence often through nothing more than checking just how negative bond rates would spring. There were German bunds and even indications of [...]
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