It was said to be something hugely significant, truly momentous - but only until it started to misbehave all over again. This was the summer of 2013, SHIBOR Summer in China and the misunderstood, mislabeled “taper tantrum” in the US$. Consistent with the latter’s more optimistic take on the world, the 30-year swap spread turned positive for the first time [...]
The US Treasury auctioned off $45 billion in 3-month (13w) bills this morning. Despite the Federal Reserve paying 5 bps for SOMA UST collateralized, for “some” reason the primary market’s players wanted this issue far more. The auction’s high was just 3.5 bps, its median 2.5. These are down from 4 bps and 3.5 bps, respectively, last Monday. With the [...]
The Fed meets this week and is widely expected to say that it is talking about maybe reducing bond purchases sometime later this year or maybe next year or at least, someday. Jerome Powell will hold a press conference at which he'll tell us that markets have nothing to worry about because even if they taper QE, interest rates aren't [...]
The American people were first introduced to the Treasury helicopter in 2008, not 2021. The Bush Administration's “radical” approach to keeping the Great “Recession” from becoming a contraction, obviously, failed spectacularly even though the initial returns had been positive – literally positive in how Q2 ’08 GDP suddenly turned higher as if this was by skilled design. Economists, including those [...]
The dollar stopped falling on January 6, beginning a reversal which has lasted more than eight months. This forewarning was joined two days later when TIPS breakevens crossed, inverting the 5-year when compared to the 10-year. About a week after that, T-bills.In other words, as I had written up last week, there actually were quite a few contrary indications in [...]
January 2021 was, it may have seemed, only the start of something big. Huge. Colossal. Coronavirus vaccines had been discovered, publicized, and rolled out, meaning for the first time a real shot at ending the pandemic. The world could quickly get back to normal, the economy recovering its footing, and between January and that bright future Uncle Sam was going [...]
As another central bank, the Federal Reserve, seriously contemplates tapering its latest QE, its policymaking members would do well to consider the several others who either did or thought they should. One of them, obviously, the same Fed but back in 2013. Another was the Bank of Japan early in 2018.It was March that year and “monetary” officials gathering around [...]
Central banking’s real monetary power comes from a different kind of printing. We’re all taught and told from the very beginning that it's derived from enjoying the money printer, the ability to stack currency at will. No. In actual fact, monetary policies are all money-less leaving “monetary” authorities to employ instead the press which prints words.Deciding which words, and more [...]
Almost universally, the comeback is always QE. Whenever trying to discuss the bond market’s unmovable pessimism in 2021, especially now about six months after reflation ended, people just don’t want to hear about such low (and lower) growth and inflation expectations in nominal yields. No, that’s not deflationary potential, they’d say, it was and is the Fed buying bonds which [...]
Are giant French freightliners really so generous? Big companies can be known for their philanthropy, of course, but such efforts aren’t usually folded into their own business activities. Generally speaking, the beneficiaries of corporate charity tend to be strangers. If determined giving is actually being applied within the narrower confines of the corporation, that’s not altruïsm but economics (small “e”). [...]
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