Another “unexpected” decline in home data has raised even bigger questions about the idea that the real estate market is settling into some steady and slow growth period. That has been the revised hope after the MBS disaster in late 2013. The middle of 2014 saw a renewed not-quite-enthusiasm for real estate which led to the belief that housing might [...]
The Danish central bank, Danmarks Nationalbank, reduced its deposit rate floor by 15 bps to -0.5%. In what looks like a preemptive move aimed at potential destabilization ahead, so far they have managed to keep the krone from following in the franc’s destructiveness (short run). I think it is more than credibility at this point, after all the Swiss National [...]
Looking through all the various indications of the “dollar” world, there is seemingly to this moment a great deal of calm. This is in sharp contrast to December where bearishness and tightening were not just evident but dangerously so (across almost every part of the global financial system). But those two observations are not necessarily expected in sequence, as typically [...]
Janet Yellen and her colleagues would like to welcome you, not unlike Tim Geithner’s 2010 expedition in this area, to the recovery. They have removed pretty much all language that would make you think there was anything like lingering destructiveness or erosion. In doing so, they make it very plain that they want you to believe that they will be [...]
The level of new home sales seemed to take another run at the 500k seasonally-adjusted annual rate in December. This would be the third time in 2014 that the pace of sales reached a new high point for this cycle, but the prior two were subsequently revised much lower. In fact, revisions have made it very difficult to find much [...]
The energy sector may account for a good proportion of risky credit, but that doesn’t necessarily mean that all negative price action in high yield and junk is entirely energy. While certain markets have regained comfort with the world’s various potentials, the outer echelons of US credit remain on alert. That is typically the pattern of an impending inflection in [...]
Japan has faded from the front page, but the economic disaster continues to bother. The Bank of Japan has been forced back from its first target “against” the “deflationary mindset” that launched QQE back in April 2013. The goal then was not to achieve 2% “inflation”, but rather a stable and sustained 2% rate. Needless to say, oil prices are [...]
The Keynesian revival that is currently underway in the backrooms and hallways of assorted world governments is being somewhat replicated in Europe this week. It is all predicated on the position that all previous forms of “stimulus” from the fiscal side were not the right size, composition or color for that matter and thus the lack of recovery can be [...]
Recognizing the danger of being understated, Swiss markets are a disaster. The overnight rate at -4% handily beats out the periodic specialness in US$ repo which settles at the penalty rate of “only” -3%. The 10-year bond rate is -.257%; the 15-year at -.083%. The Swiss stock index fell more than 14% in the two days after January 14, and [...]
I always believed that at some point “markets” would view the announcement of yet another “extraordinary” monetary program with actual candor rather than conditioned disbelief more befitting a magician’s audience. The primary focus would be not about future conditions, which is the entire point of monetarism in the rational expectations age, but what the “need” for more “stimulus” says about [...]
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