It is an apparent contradiction to where we can describe a desperate money supply situation yet stock prices, in particular, are at all-time highs or at least outwardly unconcerned about all of it. This isn’t anything new, however, as noted last week where we may be witnessing the third or fourth iteration of the same repeating cycle. It was, after [...]
So how does it end? It’s the only question that matters, more so perhaps than asking when this “end” might occur. We see the “dollar” tanking currencies again, though mostly the majors this time, but currencies have tanked for as long as they have floated; and a great many before that time, too. Is there something different now that wasn’t [...]
The Treasury Department’s Treasury International Custody (TIC) estimates for September were released, and though I wish they were timelier they do typically confirm what we suspect about the months at each update. There were negatives all over this latest month, including private flows, which would fit the overall narrative where Chinese money markets were all over the place and repo [...]
Clichés are clichés for a reason, largely because their meaning no longer requires precision in order to communicate information. Because of that, their use is usually limited to cultural exchanges, being largely shunned in areas when technical proficiency requires a high level of exactitude. Economics and finance in more recent years, really since August 2007, seemed to have shifted more [...]
The rout in EM’s continued into this week, suggesting that the negative reactions last week may have been more than reflexive recoiling to whatever catalyst. The media is struggling to figure it out, and so has brought up the usual suspects even though there is great inconsistency in doing so. Expectations of fiscal stimulus, infrastructure spending and reflationary policies under [...]
China’s State Administration of Foreign Exchange (SAFE) reported a large drop in forex assets in October. This was unsurprising given what we already know of “dollar” conditions from the behavior of the exchange rate itself. The pattern is by now very well established and quite predictable. At -$45.73 billion for the month, it was by far the largest decline in [...]
There bond selloff intensified the past few days in the wake of the election. I still believe that the potential Trump represents, rather than anything that has been specifically proposed, is the likely catalyst. I am also quite certain that goes along with the change in Chinese behavior where RMB are far more plentiful now than just a few weeks [...]
When I first started some years ago, the guy I worked for told me to prepare myself because this business is so often just stupid. It does make sense given the high stakes and pressure, where everybody is literally trying to outsmart everybody else every minute of every day. And those kinds of conditions, variable as they are, lead to [...]
As if anyone needed any proof as to why economics needs to be so thoroughly debunked, it was on display again today. I am talking about Rome over Carthage defeat, where the textbooks of Economics (capital “E”) should be so salted and devastated in the same manner in which the Romans banished the Carthaginians forever to nothing but history. Economics [...]
In early July, the Bank of Japan may or may not have contemplated the mother of all “stimulus.” Rumors began to fly that the Japanese central bank was, in fact, seriously considering an actual monetary helicopter as a way to boost flagging confidence rightly suspicious of any more QQE (or NIRP). We won’t know for some time (when the meeting [...]
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