A big reason why Chinese banks struggled yesterday in their daily bid for “dollars” (CNY DOWN) was the relatively unchanged economic statistics for November. Many in the media have tried to frame China’s economic situation in 2016 as if stabilizing were a positive outcome. Markets, especially funding markets, aren’t so enthused about the prospects for “weak but not getting weaker.” [...]
These things evolve, and they take time. There are a great many similarities between what is going on now and what happened in 2007 and 2008 pertaining to money, then finance, finally economy. Starting August 2007, the eurodollar system fell apart in condensed fashion, almost a typical “run” if but one of and between only banks. Starting in August 2011, [...]
Maybe it is just too complicated to do much more, but for the most part central banks work in the here and now. They may stray from time to time into strategic thinking, but given the mathematical limitations of traditional statistics, weaknesses we all know too well in 2016, that is of limited value. Even in normal times monetary policy [...]
If you are not an economist bound by dogma, or a member of the media forbidden from using opinion of all but the finest (sounding) credentials, there is no mystery. I am as tired of writing about it as you are of reading it. The mainstream is by convention of the business cycle forced into linear extrapolations. Therefore, economic accounts [...]
You can only pick one. Going back to around July 11, the People’s Bank of China decided for whatever their reasons CNY had gone far enough and that the central bank would intervene to all over again to obtain a stable currency importantly against the dollar. This was nothing new, however, as the PBOC had interceded on several other notable [...]
In December 2000, the Financial Post orchestrated what it billed as a great debate, a clash of titans pitting two giants of economics against each other in a series of eight questions. Dubbed the Nobel Money Duel, on the one side was Robert Mundell, a Nobel Laureate often credited as the “father of the euro.” On the other was Milton [...]
"Something" "Something" in Japan - cross currency basis swaps hit new record low (negative) and related effect on JGB's.
Speculators are a curious bunch, not in what they do or how they do it but more so in how and really when they attain notice. When the SEC in July 2008 banned naked short selling of GSE and primary dealer stocks, they were the obvious enemy creating “unnecessary” trouble that was amplifying what was supposed to be in the [...]
On August 30, the overnight SHIBOR rate jumped above 2.05% for the first time in more than a year. As the acronym indicates, SHIBOR is to Chinese RMB interbank liquidity as LIBOR is to eurodollars in London. In the summer of 2015, SHIBOR began rising steadily and often precipitously despite monetary policy “stimulus.” On June 27, 2015, the PBOC cut [...]
The simple fact of the matter is that 2012 wasn’t supposed to happen. By every orthodox prediction and theory about the set of tools deployed after the Great Recession (after it, the first clue) there was no reason to suspect anything but the usual cyclical occurrences. Sure, the recovery would be weak because the recession large, but retrenchment was never [...]
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