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Tag Archives: bonds

Not A Paradox Nor A Conundrum: TICked at Powell

It seems a paradox, at least like it is backwards. The financial media doesn’t help because good editorial standards rely upon the opinions and beliefs of credentialed people who have no idea what they are talking about. If you hold high office in some central bank, we are to assume you are competent about monetary issues. It’s all given a gloss of geopolitics, too, which isn’t helpful. The dollar destruction people are also onboard with how interest rates have nowhere to go but up. If the...

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Ticked About TIC: The Accidental Discovery of Perhaps The Big Bottleneck

From October 2000 to July 2001, the Treasury Department conducted a special survey of users of its Treasury International Capital (TIC) data. Nearly two decades ago, it had become apparent (to some) just how important international dollar flows were to the overall economic and financial landscape. And not just those of the United States. TIC was created ostensibly to aid in balance of payments accounting; the old idea that money was (nearly) fixed so the only thing which mattered was...

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INTERVIEW: Raoul Pal – The Coming Debt-Driven Crisis & Why The Fed Can’t Stop It.

I recently had the privilege to visit with Raoul Pal, the founder of Real Vision, to discuss a variety of topics including: The risk of recession in the U.S. What Trump’s nomination of Judy Shelton to the Fed means. Can you have a gold standard AND zero interest rates. The future of the ECB and monetary policy in Europe The real value of gold. After we stopped rolling tape on the interview Raoul and I kept going and discussed Facebook‘s Libra, cypto currency, and how much you should own. The...

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The Economy Left Millions Of Americans Behind

Remember “No Child Left Behind,” George W. Bush’s education reform plan? Congress passed it in 2001. Whether that law actually helped is subject to debate, but Bush picked a good name for it. Humans are social creatures. Our instincts tell us to make sure no one in our tribe gets “left behind,” economically or otherwise. That instinct breaks down sometimes. Or we disagree about who belongs in our tribe. It’s a big problem in either case. Hence, when people say even the poorest Americans live...

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QOTD: Bund Dearth

QOTD: Quote of the Day Nice pithy quote, which thoroughly encapsulates our narrative of global markets that the major central banks have created a yuuuge shortage of risk-free assets tipping the world economy into a bizarro Twilight Zone, where, now even Petrobras bonds trade with a negative yield.  You heard that right, Petrobras, Brazil’s state oil company. Some speculate the ECB will soon reach its limit of 33% ownership of a single issue and be forced to raise it to 50%, as the...

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The Bear On The Balcony At Bretton Woods

Ursa Major waits patiently as she watches over,  in amazement, the yield chasing salmon in a panic buying frenzy over fears of NIRP, ZIRP. negative and near zero bond yields forever and ever. The Bear on the Balcony is giving, …them a little more room to run, setting her entry and stop levels, and placing her finger on the trigger.  Letting the market tell her when it’s time to fire. She knows it’s close to feeding time and ready to hunt at S&P 3025-3100 or if the salmon retreat...

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The Problem With Keynesian Economics

In The General Theory of Employment, Interest and Money, John Maynard Keynes wrote: “The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.” I think Lord Keynes himself would appreciate the irony that he has become the...

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Kahn: 6-Ways To Prepare For The Next Market Decline

This article was originally published at Kiplinger and submitted by Michael Kahn The U.S. economy is putting up some impressive numbers in GDP, jobs and wages, but many pundits fear that a slowdown is pending. Trade-war fears with China and the European Union remain front and center in the news. And the yield curve is threatening to invert, meaning short-term interest rates may be moving higher than long-term rates. That’s often a sign of pending recession on its own. By some measures, the...

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What Has Markets Spooked? Probably Something To Do With That Huge Offshore Dollar Hole

Like a shark smelling blood in the water, I don’t care that the blood is in the water from leaking out of what will be a dead horse, if it isn’t deceased already. I pretty much intend to beat on it one way or another. The issue isn’t just fed funds, it’s why anyone cares about that market at all in 2019. The answer, as even FRBNY admits this week (the dead horse), is how the monetary world is much more complex than you’ve ever been told. It’s not just a matter for correcting textbooks. In...

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Much More Than Rate Cuts On (Dis)Inflation

Things have changed, obviously. Chairman Powell and the rest of the FOMC, the majority anyway, have come around to rate cuts. Where they were hawkish in December, noncommittal as late as May, they’ve been spooked into them over the last month or so. As it stands, the first one is less than three weeks away. It’s not so much the lack of inflation any longer. No one should ever forget the 2018 story, the inflation hysteria which raged throughout much of last year and ended in a pile of confused...

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