yield curve

There Is An Absolutely Solid Collateral Case For What’s Driving Curve Inversion(s) [Part 2]

By |2022-03-16T12:59:00-04:00March 16th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Securities lending as standard practice is incredibly complicated, and for many the process can be counterintuitive. With numerous different players contributing various pieces across a wide array of financial possibilities, not to mention the whole expanse of global geography, collateral for collateral swaps have gone largely unnoticed by even mainstream Economics and central banking.This despite the fact, yes, fact, securities [...]

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There Is An Absolutely Solid Collateral Case For What’s Driving Curve Inversion(s) [Part 1]

By |2022-03-15T20:29:23-04:00March 15th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

With the 7s10s already inverted, and the 5s today mere bps away, making a macro case for the distortion isn’t too difficult. Despite China’s “upside” economic data today, even the Chinese are talking more about their downside worries (shooting/hoping for “stability”) than strength. In the US or Europe, no matter the CPIs in either place there are cyclical (not just [...]

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Another One Inverts, The Retching Cat Reaches Treasuries

By |2022-03-14T20:24:11-04:00March 14th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

As Alan Greenspan’s rate hikes closed in, longer-term Treasury yields were forced upward as the flattening yield curve left no more room for their blatant defiance. By mid-2005, though, the market wasn’t ready to fully price the downside risks which had already led to that worrisome curve shape (very flat). While all sorts of bad potential could be reasonably surmised, [...]

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Weekly Market Pulse: Is This A Bear Market?

By |2022-03-14T07:46:24-04:00March 13th, 2022|Alhambra Research, Bonds, Commodities, Currencies, Economy, Markets, Real Estate, Stocks|

I don't know the answer to the question posed in the title. No one does because the future is not predictable. I don't know what will happen in Ukraine. I don't know how much what has already happened there - and what might - matters to the US and global economy. I don't know if the Fed is making a [...]

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Consumer Prices And The Historical Pain(s)

By |2022-03-10T20:23:03-05:00March 10th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The 1947-48 experience was truly painful, maybe even terrifying. The US and Europe had just come out of a decade when the worst deflationary consequences were so widespread that the period immediately following quickly erupted into the worst conflagration in human history. Then, suddenly, consumer prices skyrocketed and it left many Americans wondering if there would ever be an end [...]

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Odd Curve Shapes, or More Chinese Than Russian

By |2022-03-09T19:55:39-05:00March 9th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

This is a truly weird shape for the US Treasury curve to find for itself. Really steep up front, seriously upward sloping consistent with the Fed’s stated rate hike intentions (which influence short-term rates most directly up to around the 2-year note). From there on down, though, it’s flat. As in pancake, almost. I can’t recall a time when the [...]

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Houston, We Have An Oil (and inventory) Problem

By |2022-03-04T20:21:14-05:00March 4th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

If only, like in the aftermath of the Apollo 13 explosion, we could just radio Houston to get started in figuring out just the way out of our fix. Mission Control would certainly buzz all the right people with the right stuff, summoning the best engineers and scientists from their quiet divans to the frenzied and dangerous work ahead. Sadly, [...]

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The Rate Hikers Are Not Serious People

By |2022-03-03T19:38:15-05:00March 3rd, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Though I say, write, and communicate all the time how the Federal Reserve is not a central bank because it doesn’t do money and that therefore its non-money monetary policies are little more than pop psychology conveyed via an increasingly stale puppet show, you might be surprised to learn that none other than Janet Yellen has publicly agreed with my [...]

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These Are The Charts/Data The Fed Is Ignoring In Its Rush To Mistake Rates

By |2022-02-25T17:25:48-05:00February 25th, 2022|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The labor theory of inflation, the one the FOMC will use to justify rate hikes in 2022 (as far as they might go), isn’t just wages and competition for the presumed scarce marginal worker. While a tight labor market might drive up the marginal cost for labor inputs, in order for companies to then pass those higher costs back to [...]

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A Year Later, The Fact Fedwire Is Still There Tells Us Why Markets Have Done What They’ve Done

By |2022-02-23T18:55:59-05:00February 23rd, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The world seemed to have everything going for it, for once, everything coming up favorable for the first time seemingly in forever. There were vaccines, financial government interventions worldwide just recklessly chucking money at anyone with a pulse, an end to the pandemic even normalcy right in front of us. What could possibly have messed this up?It was around 11:15 [...]

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