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Tag Archives: EuroDollar

Scorching, Blistering, Highest In A Decade! Powell’s The Voice of Reason Here?

If there is one thing Economists understand very well, it’s mathematics. This is practically all they do, and all that means much to their discipline. If there’s one thing Economists don’t seem either competent with or interested in, it’s the economy. The math is supposed to match the other’s reality, yet rarely does.There are times, however, when simple calculation is sufficient and (figuratively) on the money (literally, that is the whole other story).Such was the case around 2011 and...

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Real Dollar ‘Privilege’ On Display (again)

Twenty-fifteen was an important yet completely misunderstood year. The Fed was going to have to become hawkish, according to its models, yet oil prices crashed and the dollar continued to rise. Both of those things were described as “transitory” by Janet Yellen, and that they were helpful or positive (rising dollar means cleanest dirty shirt!), but domestically American policymakers’ clear lack of conviction and courage about that rate hike regime showed otherwise. It wouldn’t be until...

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Soar or Sour: Short Run, *Then* What?

The sound of economic sizzle finally within earshot, though perhaps nearly a year too late. PMI’s for the month of March 2021 were of the sort which should have come about in May and June 2020. The “V”-shaped recovery was much talked about at that earlier time, though in PMI terms (as well as regular “hard” data) the numbers fell way, way short of it. I and others had pointed out repeatedly that to be consistent with an actual recovery, given the depths from where the recession began, the...

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The Simple Equation

My entire premise was to make this mockingly simple. Econometrics demands mathematical precision yet always comes up empty because its calculations, no matter how elegantly complex, proceed from the falsest of subjective assumptions. It won’t matter how awesome the computing power if the thing you’re trying to compute doesn’t work or act the way you believe (because everyone says so rather than the evidence).When any currency falls especially against the dollar even today the mainstream...

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Throw A German ‘Log’ On The Possible Fedwire Fire

One other fascinating, corroborating angle to the short run picture comes at us from Europe, specifically Germany. As illustrated yesterday, there’s a whole bunch of market prices/indications from around the world which have keyed in on February 24-25 as a possible turning point. The most obvious candidate which may have triggered it would be February 25th’s major US Treasury selloff. But if that was the case, why would there have been a split from Germany’s bunds (schatzes, too)? These...

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Kiwi Busted QE And Its Relation To The Reflation Story

In theory, it goes like this: QE or any sort of large-scale asset purchase (LSAP) undertaken by a central bank is needed during times of trouble in order to reduce interest rates in general. Buying bonds seems like it would lower yields, and lower yields mean more accommodative credit, therefore a boost to the real economy.So simple, straightforward, and intuitive, who could possibly argue otherwise?And the theory has been studied (to death). Ever since the Bank of Japan pioneered this...

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OK NYMEX, Beginning To Notice The Fine Print?

Is it a building case of/for selling the news? Another substantial down day in the oil market brings the total slide to just more than 13% (since March 5). Hardly anything earth-shaking on its own, not with the WTI front month futures contract gaining an impressive 85% since the end of October. During those four and a half months, the news was all good (or so it seemed) beginning in the world of pharma (vaccines) and spreading to politics (elections and what that was going to mean for...

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What *Must* Lie Beyond the M’s

This particular part of the hysteria is understandable, if thoroughly unconvincing. Forget the Fed and its bank reserves for moment, whatever those are now and then. The banking system is where it’s at, monetarily speaking, and it is the banking system which seems to have lost its handle on the money printing lever. If we’re focused beyond bank reserves and upon broad deposit-based money, there does seem to be reason for alarm. The increase is simply unprecedented; even on a log scale, it...

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Reflation Amplitude, Important, What About Frequency?

It’s understandable, even natural to focus on the amplitude of this or any BOND ROUT!!! and make comparisons to past reflationary trends on that basis alone. But what about frequency? By that, I don’t mean how frequently reflation shows up, though it has been fairly regularly if only because we never get any of that inflation and recovery predicted during each one. Hysteria the only mainstream byproduct. Maybe better characterized as duration (though not wanting to get that confused with...

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There’s Two Sides To Synchronize

The offside of “synchronized” is pretty obvious when you consider all possibilities. In economic terms, synchronized growth would mean if the bulk of the economy starts moving forward, we’d expect the rest to follow with only a slight lag. That’s the upside of harmonized systems, the period everyone hopes and cheers for. What happens, however, when it’s the leaders rather than laggards who begin to shift toward the other way?It’s a question the global economy has confronted four times over...

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