Saturday , August 17 2019
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The author Gregor Samsa
Gregor Samsa
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Global Macro Monitor

“Fake Economic Data”: We Did Warn You

It was so predictable. Furthermore, it’s only a matter of time before our national economic data is labeled fake news and the product of manipulation by the “deep state.” Dig deeper and sharpen your pencils, folks.  – GMM, May 7th This just in, Though he [Trump] has expressed private worries about Wall Street, he is also skeptical about some of the weaker economic indicators, wondering if the media and establishment figures are manipulating the data to make him look bad, according to...

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The Short-Term Heavy Treasury Curve

Before reading further we suggest you look at our latest post, The Perversion Of The Yield Curve Inversion, for some context. Gravitational Pull Toward Curve Flattening And Inversions Note the structure of the Treasury curve in terms of the amount of debt outstanding  (black line) for the given years of maturity.   The bias, gravitational force, and natural motion are toward flattening or to invert by the very fact that more than 50  percent of the coupon debt has a maturity of 1-4...

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The Perversion Of The Yield Curve Inversion

We should be on vacation but it never fails that volatility spikes as soon as we leave our desk.   It must be the Ides Of August. Wait, it is.  Et tu Brutal! Nevertheless, we can’t help ourselves and have to throw in our two cents on the yield curve noise whipping around the market today. I had a conversation with a friend this afternoon that went something like this: Friend:   What is the yield curve telling us?  Me:  The Patriots and the Rams are going back to the Super Bowl for a...

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More Monetary Insanity & The Negative Yielding Bond Bubble

Had to get this last one in before we hit the surf. We like to look at the Cleveland Fed’s Median CPI calculation as it removes monthly outliers that can pull the averages up or down.  It hit a 10-year high in July and is pushing up close to 3 percent. Of course, we are in deflation and U.S. bonds yields are going negative.  Doesn’t the Median CPI inflation trend confirm it? Now tell us again how many times does the Fed need to cut?   Where have they failed in meeting their dual...

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Deep Fakes Seem So Real…

Stunning. Imagine how these will be weaponized in the 2020 presidential campaign. I watched this video last night and it's still freaking me out. A deep fake where Bill Hader *turns into* Tom Cruise and Seth Rogan *while impersonating them*. (via @MohamedGhilan / Ctrl Shift Face on YouTube) pic.twitter.com/59evJ5Etfi — Gavin Sheridan (@gavinsblog) August 12, 2019 Share this:Like this:Like Loading...

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The Global Consequences Of A Narcistic And Incompetent POTUS

The world is starting to move sideways. The market talking heads are so clueless. It’s almost laughable listening to them trying to explain away in isolation how the pieces of the puzzle are starting to converge that will or already have ushered in, what we believe, will be an ugly bear market. Believing the Fed can rescue anything and everything is so naive and ridiculous.  We remain perplexed why JFK didn’t call in the Fed to end the Cuban Missile Crisis, or why President Trump...

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Negative Yields Versus Negative Coupon Rates

There is a big difference between a bond with a negative yield to maturity than a bond with a negative coupon rate.   Many in the market conflate the two. We are searching for bonds that pay a negative coupon rate.  Rare, but some do exist. Here is a good clarification. Because of the complexity of having a negative coupon, it is common on negative-yielding issues to sell the bonds at a cash price higher than par. This means the issuer pays back less than the amount borrowed, removing...

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“Rent Control” Problems Emerging In Bond Auctions

Hat Tip: Gregory Mannarino  @GregMannarino The bid-to-cover ratio, indicative of the number of investors who put in offers to buy the debt and a gauge of demand, stood at 2.19. That is down from the 2.4 recorded in the last sale last month and marks the second-lowest level since March 2009.  – FT, August 8th We were not surprised at yesterday’s weak 10-year auction though today’s $19 billion of 30-years went off fairly decent. In our Tuesday post, we raised the question, …we are...

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