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Tag Archives: Interest rates

So Much Bond Bull

Count me among the bond vigilantes. On the issue of supply I yield (pun intended) to no one. The US government is the brokest entity humanity has ever conceived – and that was before March 2020. There will be a time, if nothing is done, where this will matter a great deal.That time isn’t today nor is it tomorrow or anytime soon because it’s the demand side which is so confusing and misdirected. Realizing this is true does not cancel your vigilantism. For two years now we’ve heard about how...

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The Reason For So Many Lies: He Finally Realizes He’s In Way Over His Head

This is not a man who’s comfortable thrust into a position of leadership. Say what you want about Ben Bernanke, and there’s a lot that still needs to be said, he at least carried on with the arrogance through thick and thin (almost entirely the latter). Jay Powell sounds like a boxer who just realized the lightweight he thought he was fighting put on 75 lbs of muscle and has been practicing by sparring with world champs.So, when he still says he’ll be the champ the words instead come out of...

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There Was Never A Need To Translate ‘Weimar’ Into Japanese

After years of futility, he was sure of the answer. The Bank of Japan had spent the better part of the roaring nineties fighting against itself as much as the bubble which had burst at the outset of the decade. Letting fiscal authorities rule the day, Japan’s central bank had largely sat back introducing what it said was stimulus in the form of lower and lower rates.No, stupid, declared Milton Friedman. Lower rates don’t mean stimulus they mean monetary policy has been tight leaving the...

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“Support”

They merely repeat the words, as it is intended. With major fanfare and widespread praise, the Federal Reserve weeks ago had announced it was going to buy corporate bonds. Well, not actual bonds but ETFs. It hasn’t bought a single one of those, either, at least not until today and yet the program is being assigned the usual magical properties. U.S. corporate bond exchange-traded funds rose Tuesday after the Federal Reserve said it would begin purchases of the securities as part of its...

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Operation sulfatos

The military phase was an all-out joke. Carlos Castillo Armas had fewer than 500 men as his “invasion” force. Yet, with only that many he had expected to take back the entire country. More surprisingly, he succeeded. Lt. Colonel Armas had previously participated in the 1944 Guatemala uprising that had forced Jorge Ubico from power. As a supporter and close confidant of Colonel Francisco Javier Arana – who led the revolt and wielded tremendous influence over the armed forces as chief...

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Three Quarters of a Trillion In Three Weeks, And Bill Yields Are Down Again

Hold all the congratulations. Jay Powell is, with a huge assist from the financial media, trying to pre-empt what comes next by taking a premature victory lap. The Fed isn’t just your central bank it is your friend. The amount of pure propaganda being put out lately is understandable if still disgusting. March was a good month to include in the annals of central banking? Who knew? Reuters writes today (thanks M. Simmons) about how the Federal Reserve is saving lives. Saving lives! Three...

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Michael Markowski: Markets Now At Tipping Point, Ride Will Be Epic.

 Michael Markowski has been involved in the Capital Markets since 1977. He spent the first 15 years of his career in the Financial Services Industry as a Stockbroker, Portfolio Manager, Venture Capitalist, Investment Banker and Analyst. Since 1996 Markowski has been involved in the Financial Information Industry and has produced research, information and products that have been used by investors to increase their performance and reduce their risk. Read more at BullsNBears.com The market...

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Shedlock: Recession Will Be Deeper Than The Great Financial Crisis

Economists at IHS Markit downgraded their economic forecast to a deep recession. Please consider COVID-19 Recession to be Deeper Than That of 2008-2009 Our interim global forecast is the second prepared in March and is much more pessimistic than our 17 March regularly scheduled outlook. It is based on major downgrades to forecasts of the US economy and oil prices. The risks remain overwhelmingly on the downside and further downgrades are almost assured.IHS Markit now believes the...

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Vital Lessons Still Not Learned: Be Careful About GFC2

It’s one of those crisis-level-of-illiquidity things that if you heard about it in normal times it would make you shake your head in disbelief. During a full-blown meltdown maybe it’s not standard stuff, but given the chaotic conditions it doesn’t seem so preposterous, either. Negative convexity is an otherwise benign phenomenon in fixed income that when combined with a lack of liquidity can rip your throat out in a heartbeat. The reason it kills is how it can act like proverbial quicksand;...

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Michael Markowski: Why You Should Sell The “Bear Market Rally.”

Michael Markowski has been involved in the Capital Markets since 1977. He spent the first 15 years of his career in the Financial Services Industry as a Stockbroker, Portfolio Manager, Venture Capitalist, Investment Banker and Analyst. Since 1996 Markowski has been involved in the Financial Information Industry and has produced research, information and products that have been used by investors to increase their performance and reduce their risk. Read more at BullsNBears.com The...

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