With a week to go before April 15, GC repo rates remain undisturbed from their recent elevated fashion. The rate of decline has also slowed appreciably, down to just a few pips today, as volume continues to be stable at an also raised level (compared to recent conditions). And despite the FOMC minutes, the eurodollar curve has only moves 1-2bps [...]
The June 2003 FOMC meeting is one of those events that has only taken on increased relevance and significance with time. That gathering marked a major shift in monetary policy as it was, particularly with relation to the fomented housing bubble, as the FOMC was debating the zero lower bound. The discussion centered around the proposed monetary alignment that would [...]
From a purely, detached analytical perspective it is highly fascinating the possibility of observing a liquidity “development” in almost realtime whether one develops or not. If past patterns hold, and there isn’t any specific expectation for that other than heightened probability due to systemic recurrence, then April 15 is a target point for the next one in the series. This [...]
The inflection points of the past year and a half or so have become waypoints by which to mark the progress toward seemingly darker days ahead. In many respects, as I tried to express earlier today, this is nothing new not just in recent history but in troubling comparison to far worse fates. Those specific dates have taken on added meaning [...]
Almost two weeks after the event, there is still more than a little nervousness about what took place on October 15 in UST trading – and for very good reason. Up to that point, proclamations about systemic liquidity degradations were just theoretical to most people. The reason was, and continues to be, that nobody seems to care about disruptions in [...]
My colleague Joe Calhoun noted that the Wall Street Journal has documented further anecdotes about the credit market illiquidity this week. Corporate-bond investors have struggled this week to find trading partners for some large orders, causing unusual price drops and raising concerns that trading could freeze in future market turmoil. “Buyers just disappeared” early Thursday for many low-grade bonds and [...]
An unbelievable morning of credit market trading has at least seen some semblance of “market” forces return by the afternoon. One aspect is certain, that the open was about as illiquid as the treasury market has seen in a long, long time. We should not make the mistake of illiquidity being only associated with selling, particularly since today’s volatility was [...]
There is a slow but steadily building sense that there is more than a little problem with systemic liquidity as it stands right now. While not quite mainstream, there has been some minor attention devoted to repo problems and now credit trading. An article in Bloomberg today does a pretty good job of sketching out the real world as it [...]
Since we are now in the middle of the final month of a quarter, checking repo stats shows what we have come to expect of a fragile liquidity system. Once again, repo fails spiked sharply in the latest weekly statistics from FRBNY as primary dealers and the Fed’s own repo “fix” fail to affect the “resiliency” that FOMC members appear [...]
New home sales rose on a year-over-year basis, but the adjusted figures suggest that says more about softness in July 2013 than strength in July 2014. Whatever the case may actually be, the seasonally-adjusted rate of home sales has been quite disappointing after the “surge” post-winter. In fact, that bounce has been all but revised away, leaving what looks like [...]
Stay In Touch