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Tag Archives: markets

Eurodollar Futures Curve Update (spoiler: still inverted)

I guess I took my own advice a little too literally. I did write that when the eurodollar futures curve first inverted, it was going to be dull. Didn’t start out that way, of course, with a small bit of theatrics right during that front week in December when the inversion first showed up. Ever since then, it has stuck to what I had said on Day 2 about what you should expect, or not to: For the time being, our focus for now remains on the twisting. And we shouldn’t expect much more out of...

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The Historic Christmas Binge

The reason that store shelves are occasionally empty, as any social media hashtag trend will tell you, is that Americans are still buying an amazing amount of goods. For December 2021, Christmas was hardly canceled. The Census Bureau today reported that retailers during the biggest month of last year, of every year, grabbed an astoundingly huge $714 billion in overall sales. Almost three-quarters of a trillion in a single month.Not just the finale, though, total retail during the whole of...

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Let’s Talk TIPS

Real yields have moved higher, surging, actually, to start this year (up until more recently, that is). The 5-year TIPS rate has gone from ungodly ugly mid-November, sunk down to -191 bps, to a still-awful but much less so -130 bps as of today. That’s a 61 bps move in less than two months, thirty of those coming since the end of December.Good news? Something else?No sense in dragging this out, spoiler alert, the answer is quite clearly something else. Unless you take the Fed’s rate hikes...

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There’s (still) A Ghost On The Monetary Throne

Dark leverage, that’s the real stuff. In a ledger-based monetary system, money creation comes from expanding leverage. Simple. Clean. Obvious. How it gets done, that’s the genius, the beauty, and the disaster. Call it money of account, or ghost money, fictional currency, whatever. It’s the secret sauce which, when you see it, you just can’t un-see it. This is the real red pill, as it were. Eurodollar University’s Making Sense; Episode 89, Part 3: Bitcoin’s El Salvador Conundrum...

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US CPI Reaches Seven On US Goods Prices, With Disinflation Setting In Everywhere Else (incl. US Services)

How is that US Treasury rates out in the independent longer end of the yield curve have now “suffered” a seven percent CPI to go along with double taper and triple maybe quadruple (if the whispers are to be believed) rate hikes this year, yet have weathered all of that allegedly bond-busting brutality with barely a market fluctuation? The short end of the curve, as noted here, is being pressured by only the last of those things, rate hikes, and from them creating the malodorous Conundrum...

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Sentiment v. Substance: Checking In On Collateral Via, Yes, The Fed

The Federal Reserve, like other central banks around the world, it does lend out the securities it owns and holds. Sophisticated modern wholesale money markets are highly collateralized, so much so that collateral itself takes on the properties of currency. Elasticity of collateral is as much – if not more – important as elasticity of other forms of wholesale money (therefore excluding bank reserves).Dealers, however, they don’t much like using the Fed’s Securities Lending operations for...

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China’s Petroyuan, Uncle Sam’s Checkbook, The Fed’s Bank Reserves: Who Really Sits On King Dollar’s Throne? (trick question)

A full part of the inflation hysteria, the first one, was the dollar’s looming crash. The currency was, too many claimed, on the verge of collapse by late 2017, heading downward and besieged on multiple fronts by economics and politics alike. Basically, the Fed had “printed” too much “money” and the Chinese playing some “long game” were purportedly ready at any moment to snatch the role of world reserve by manipulative force from the out-to-lunch Americans. Those two came to a head early in...

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It’s Not Perfume But It Does Smell Funny: Conundrum #5

When Alan Greenspan sat in front of the politicians in Congress back in February 2005, he purposefully made it seem like what was taking place at that time was some kind of new and unusual development. Yeah, the guy who had previously become famous for fedspeak – the ability to use a lot of words while saying nothing – would regularly slip right out of it whenever it suited his purposes.Those were inflation, back in early ’05. Already people were growing nervous, something about house...

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Weekly Market Pulse: On Second Thought…

In individuals, insanity is rare; but in groups, parties, nations, and epochs, it is the rule. Friedrich Nietzsche   The new year got off to quite a bang last week. It was almost as if someone flipped a switch and investors/traders suddenly decided that all that stuff they believed last year was just so passe. Growth stocks? Nah, who wants those? Crypto? Are you frigging kidding me? Inflation? No, that’s past its prime. Bonds? Not only no, but hell no. TIPS? Don’t need those...

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