I thought he might wait awhile longer given how things have played out. I guess not. Bill Gross, the former “bond king” at PIMCO, was back to advertising his position that the great bond bull market of the past quarter century is finished. In a tweet from his new employer Janus (h/t ZeroHedge) it seems there is no level for [...]
The Treasury Borrowing Advisory Committee (TBAC) was established a long time ago in the maelstrom of World War II budgetary as well as wartime conflagration. That made sense. To fight all over the world, the government required creative help in figuring out how to sell an amount of bonds it hadn’t needed (in proportional terms) since the Civil War. A [...]
FRBNY’s December 2017 Primary Dealer survey results aren’t yet published, so we will have to wait a few days for the collection of those banks’ economists to tell us what they think their own traders likely won’t do. It’s a mess in that situation, but one as old as the crisis. Nevertheless, Economists for some reason still occupy prime slots [...]
With UST yields backing up a little bit after the yield curve collapsed so far so fast, the combination of tax cut and reform “stimulus” juxtaposed with the constant, non-transitory mainstream message of recovery and growth has left us with yet another BOND ROUT!!! It has been somewhat if not completely reminiscent of earlier in 2017 when the mere promise [...]
The Federal Reserve’s Empire State Manufacturing Index fell slightly in its December 2017 estimate. At +18, that’s down from 19.4 in November and a high of +30.2 in October. It’s also nowhere near the low for the year, a -1.0 recorded back in May. This particular PMI is potentially noteworthy for what appears to be a replicating cycle. In a [...]
It was another pretty embarrassing day for the Federal Reserve and its policymaking body the FOMC. The latter voted, as expected, to raise the federal funds corridor (or double floor, if you can’t get over IOER fail) by another 25 bps. The long end of the Treasury bond market, however, was bid pushing yields down not up. There is a [...]
As part of its effort to stress its own self-importance, the Federal Reserve conducts a survey of the Primary Dealer members through its New York branch. A written questionnaire is sent out to each bank in advance of every monetary policy meeting. The purpose is for monetary policymakers to make sure that there aren’t any big surprises, that the market, [...]
I’m going to go out on a limb and claim there is something seriously wrong in repo. All jokes aside, I know it sounds like a broken record but the dimension that matters is not intermittent collateral problems so much as the greater intensity to them and in a condensing timeframe. Escalation is a description you really don’t want to [...]
Though the BEA revised GDP slightly higher for Q3 2017, the government agency took hourly compensation out to the woodshed. On a quarterly basis, this metric of labor market wage pressures is often quite volatile. In Q4 last year, for instance, nominal hourly compensation was -4.5% Q/Q (annual rate), followed immediately by a 4.9% gain in Q1 2017. For Q3 [...]
You do have to wonder to whom the increasingly shrill bond market declarations are being directed. It’s very likely that Bloomberg’s now daily haranguing “the yield curve can’t possibly be right” tirades aren’t meant for UST investors. Rather, it is perfectly evident that the treasury market is going to do what it does regardless, and that the media, in general, [...]
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