Tuesday , September 21 2021
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Tag Archives: collateral

Bills Flipping The Debt Ceiling

The dollar stopped falling on January 6, beginning a reversal which has lasted more than eight months. This forewarning was joined two days later when TIPS breakevens crossed, inverting the 5-year when compared to the 10-year. About a week after that, T-bills.In other words, as I had written up last week, there actually were quite a few contrary indications in January 2021 just like there had been during September 2017. These may have been less loud than four years ago, yet proving to have...

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As Fed Focuses on Taper, It’s About To Get (a lot?) More Interesting In Bills

In the absence of the 42-day Cash Management Bill, all that demand for it has to go somewhere. Treasury stopped offering this issue ten days ago on August 17, which is when 4-week bill yields dropped more persistently into the 3s (bps). Yellen’s Department will try to supplement next Tuesday by reopening the August 10 issue of the 42-day, selling $45 billion of what will be essentially a 21-day CMB. In addition to these eliminations and adjustments, there are ongoing subtractions is what’s...

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A TIC Trio of More Serious Deflation Potential: Asset Rebound, Banks Can’t Borrow T-bills From Foreigners, And The China Cringe Which Goes Along

The Treasury Department’s TIC update for the month of June 2021 was, well, interesting. Not in a good way, either (post-2014, is it ever actually good?) There are just too many nuggets to digest in one sitting, so here I’ll merely go over three major developments: an update to the May 2021 big dollar warning; a big, nasty wince given this particular China twofer; and what the hell must be going on without US banks being able to borrow US T-bills from foreign non-banks (yes, you read that...

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CPI’s At Fives Yet Treasury Auctions

A momentous day, for sure, but one lost in what would turn out to be a seemingly endless sea of them. October 8, 2008, right in the thick of the world’s first global financial crisis (how could it have been global, surely not subprime mortgages?) the Federal Reserve took center stage; or tried to. Having bungled Lehman, botched AIG, and then surrendered to Treasury which then screwed up TARP, the world’s entire financial edifice was burning down while US policymakers (they aren’t central...

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Gold Slammed Early Asia In Trade With China Trade Then Inflation

This one wasn’t nearly so perfect as the scramble for collateral had been a few Tuesdays ago. Last night’s, however, did have a sizable, visible contribution from the gold marketplace. That’s a significant tell even if it didn’t necessarily correlate by the minute with T-bills and other collateral numbers.In this instance if only because the gold “slam”, which was enormous, took place the at very nearly the earliest instance it possibly could have. T-bills joined in the scramble once they...

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Go Early, Go Fast? Go Deflation

Go early and go fast. This was the message FOMC Governor Christopher Waller wanted to send to the CNBC audience watching his interview yesterday on that channel. He was referring to the possible taper of QE6. In Waller’s view, if the US economy lives up to its current hype in the form of two more blowout jobs numbers, those would confirm the Governor’s view inflationary potential is perhaps much higher than indicated by the Fed’s overall “transitory” stance.He doesn’t mean to say the...

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Tapering The Truth

Ceremony and ritual are not just important concepts for priming and keeping faith, they are absolute essentials. There’s a reason why cult leaders make themselves appear – at every instance – indispensable while at the same time keeping their masses busy with nonsense. Can’t ever permit thinking too much lest the house of cards crash downward at the first slight breeze of independent thought.So it is with these Rites of FOMC. From back before Greenspan the “Maestro”, we have...

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Bills Down, RRP Up

The Federal Reserve has done us a solid favor by opening wide its RRP window. Quite by accident, obviously, these policymakers hardly useful monetary stewards, we now have another indication, and a more direct one (though still indirect overall), relating on the surface two seemingly very different factors. The correlation found there between T-bills and that has increased the visibility of the shadows behind both.And one which continues to prove itself. Here’s where we left off (kind of) a...

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Golden Collateral Checking

Searching for clues or even small collateral indications, you can’t leave out the gold market. We’ve been on the lookout for scarcity primarily via the T-bill market, and that’s a good place to start, yet looking back to last March the relationship between bills and bullion was uniquely strong. It’s therefore a persuasive pattern if or when it turns up again. To recap the main push of last year’s acute dollar shortage: Over the past several dreadful weeks of liquidations the pattern has...

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Sorry, One More On Bills: Today A Really Good Example of All The Things We’ve Been Focused On Lately

I had intended to lay off the T-bills today, just to write about something else, anything else, but, as often occurs, circumstances intervened. We’ve been subjecting you to seemingly unrelenting focus on Treasury bills’ various follies this year. The reason is quite simple, and trading early in the morning today a very good example both of “what” and “why.”FRBNY last week called it a “scramble for collateral.” Its telltale signs show up in the bill market (though not strictly bills) very...

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