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Tag Archives: tic

TIC: The Calm (June) Before the Storm (August)

As far as recent times may be concerned, June 2019 wasn’t that bad of a month. Compared to some this year, it was downright uninteresting. Starting with the UST market, there was a plunge in yields (bad sign for global dollar shortage) in the second half of April and throughout May. June saw more steady trading which continued into July that was almost reflationary – until the Fed’s panicky “one and done” kicked off this month’s mess. The latest TIC figures now updated through the month of...

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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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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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Powell Surrenders: I Told You Last Year It Was A Lie; Or, Here’s Almost The Whole Of It

Jay Powell has had his mind changed for him. Why? Not even a year ago he was downplaying things like federal funds. The rise in that one anachronistic rate was inconsistent with a healthy financial system poised for the good times that come with serious economic acceleration. Quite the opposite, actually. To dismiss the obvious contrary signal, in very place our central bankers figure only their policy signals apply, the Fed uncorked a whopper. Last April, just as everything was starting to...

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TIC Reveals The Landmine; This Time Is Already Different

I’ve been writing since October when China reopened from that month’s Golden Week holiday that big dollar problems were imminent. You needn’t have taken my word for it, the PBOC said as much. Not directly, of course, but in interpreting the central bank’s anticipated behavior left little doubt.  Over the next few months, more and more it seemed as if the entire global economy struck a landmine; the not-decoupled US economy stuck right in the thick of it, too. Recession indications spread...

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Draghi Ends Calm Ahead of FOMC, Sending the Euro and Yields Down

Overview:  ECB President Draghi underscoring the likely need for more stimulus broke the subdued tone as market participants took a "wait and see" stance ahead of tomorrow's FOMC decision.  Draghi's comments sent the euro through $1.12 for the first time in two weeks and drove European bonds yields to new lows.  Asian equity markets were mostly higher, with the exception of Japan.  As order returned to Hong Kong, it was the Hang Seng that led the region with a little more than a 0.9%...

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The Rate Cuts Have Already Started

In case you missed it, the rate cuts have already started. They actually began last year among the major economies in India. If we are counting only DM countries, then Australia and New Zealand are first out of the gate; the latter smaller country beating the larger former by around a month. In a way, it is fitting how even in rate cuts there is escalation. And in doing so, it has become perfectly clear what’s got them so bothered. Well, perfectly clear about “what” if not so much about...

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From TIC’s Big March Number Right To Powell’s Future Rate Cut(s)

Perhaps it shouldn’t come as a surprise. After all, during the first quarter of this year several key banks announced they had had enough. Goldman Sachs, Nomura, Credit Suisse, as well as others, they all broadcast cuts to key operations. The FICC stuff, or bond trading to put it euphemistically. The very place the world actually gets dollars. Only, they aren’t dollars so much as shadow dollars or eurodollars. A credit-based global currency therefore requires a credit base, meaning bank...

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US Struggles to Strike a Less Strident Tone

Overview: Retail sales and industrial production disappointed in both the US and China prior to the end of the tariff truce, declared by the US in a series of presidential tweets on May 5.  The reaction function of the US to the drop in equities was to play down tensions on three fronts.  First, a US team is expected to return to Beijing in the coming weeks.  Second, Trump pushed out the decision about auto tariffs until the end of the year and hangs over the bilateral talks with Japan...

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