Category Archive: 5.) Alhambra Investments

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Revisiting The Last Overhang

2021-09-29

One reason why I still believe the US most likely would have entered a recession at some point in 2020 even without COVID wasn’t just the yield curve inversion that popped up several months before then. In August of 2019, the small part of the Treasury curve most people pay attention to (2s10s) did send out that dreaded signal, suggesting already to expect contraction in the intermediate term ahead of then.

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August Avoids Zero In JGB’s

2021-09-28

by Jeffrey P. Snider

2021-09-28

Central banks and their staffs have long been accused of trying to hide inflation. This allegation had been a staple of their critics, those charging reckless monetary policies for creating “too much” money that had allegedly been causing price imbalances all over the financial map.

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Weekly Market Pulse: Not So Evergrande

2021-09-27

by Joseph Y. Calhoun

2021-09-27

US stocks sold off last Monday due to fears over the potential – likely – failure of China Evergrande, a real estate developer that has suddenly discovered the perils of leverage. Well that and the perils of being in an industry not currently favored by Xi Jinping. He has declared that houses are for living in not speculating on and ordered the state controlled banks to lend accordingly.

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All Eyes On Inventory

2021-09-24

by Jeffrey P. Snider

2021-09-24

You’ve heard of the virtuous circle in the economy. Risk taking leads to spending/investment/hiring, which then leads to more spending/investment/hiring. Recovery, in other words. In the old days of the 20th century, quite a lot of the circle was rounded out by the inventory cycle. Both recession and recovery would depend upon how much additional product floated up and down the supply chain.

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Weekly Market Pulse: Time For A Taper Tantrum?

2021-09-20

by Joseph Y. Calhoun

2021-09-20

The Fed meets this week and is widely expected to say that it is talking about maybe reducing bond purchases sometime later this year or maybe next year or at least, someday. Jerome Powell will hold a press conference at which he’ll tell us that markets have nothing to worry about because even if they taper QE, interest rates aren’t going up for a long, long time.

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August Retail Sales Surprise To The Upside, Because They Were Down?

2021-09-17

by Jeffrey P. Snider

2021-09-17

According to the movie The Princess Bride, the worst classic blunder anyone can make is to get involved in a land war in Asia. No kidding. The second is something about Sicilians and death. There is also, I’ve come to learn, an unspoken third which cautions against chasing down and then trying to break down seasonal adjustments in economic data.Some things are best left just as they are published.

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Weekly Market Pulse (VIDEO)

2021-09-08

by Marcelo Perez

2021-09-08

Alhambra CEO Joe Calhoun talks about last week’s surprising market reaction to the unemployment numbers and why it’s important to study the bond market.

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What’s Real Behind Commodities

2021-09-08

by Jeffrey P. Snider

2021-09-08

Inflation is sustained monetary debasement – money printing, if you prefer – that wrecks consumer prices. It is the other of the evil monetary diseases, the one which is far more visible therefore visceral to the consumers pounded by spiraling costs of bare living. Yet, it is the lesser evil by comparison to deflation which insidiously destroys the labor market from the inside out.

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Taper Without Tantrum

2021-08-17

by Jeffrey P. Snider

2021-08-17

Whomever actually coined the term “taper”, using it in the context of Federal Reserve QE for the first time, it wasn’t actually Ben Bernanke. On May 22, 2013, the central bank’s Chairman sat in front of Congressman Kevin Brady and used the phrase “step down in our pace of purchases.” No good, at least from the perspective of a media-driven need for a snappy one-word summary.

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Weekly Market Pulse: Happy Anniversary!

2021-08-16

by Joseph Y. Calhoun

2021-08-16

Today is the 50th anniversary of the “Nixon shock”, the day President Richard Nixon closed the gold window and ended the post-WWII Bretton Woods currency agreement. That agreement, largely a product of John Maynard Keynes, pegged the dollar to gold and most other currencies to the dollar.

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CPI’s At Fives Yet Treasury Auctions

2021-08-12

by Jeffrey P. Snider

2021-08-12

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.

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A Real Example Of Price Imbalance

2021-08-11

by Jeffrey P. Snider

2021-08-11

It’s not just the trade data from individual countries. Take the WTO’s estimates which are derived from exports and imports going into or out of nearly all of them. These figures show that for all that recovery glory being printed up out of Uncle Sam’s checkbook, the American West Coast might be the only place where we can find anything resembling Warren Buffett’s red-hot claim.

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The Two Big Anniversaries of August: The Lost Decade (plus) Of The ‘Fiat’ Half Century

2021-08-10

by Jeffrey P. Snider

2021-08-10

As my esteemed podcast co-host Emil Kalinowski has already mentioned (recurrently), we have, this year, two major anniversaries during these dog days of summer circled on our calendar. Today is, obviously, August 9 and for anyone the slightest familiar with the eurodollar story, that date is seared into their consciousness for as long as it will take to rebuild from the ashes created by the monetary fire lit that day. It has been, sadly, fourteen...

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Weekly Market Pulse: What Is Today’s New Normal?

2021-08-09

by Joseph Y. Calhoun

2021-08-09

Remember “The New Normal”? Back in 2009, Bill Gross, the old bond king before Gundlach came along, penned a market commentary called “On the Course to a New Normal” which he said would be: “a period of time in which economies grow very slowly as opposed to growing like weeds, the way children do; in which profits are relatively static; in which the government plays a significant role in terms of deficits and reregulation and control of the...

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Sophistry Dressed (as) Reallocation

2021-08-04

by Jeffrey P. Snider

2021-08-04

Stop me if you’ve heard this before: About US$275 billion (about SDR 193 billion) of the new allocation will go to emerging markets and developing countries, including low-income countries.

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Golden Collateral Checking

2021-07-27

by Jeffrey P. Snider

2021-07-27

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.

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Weekly Market Pulse: Buy The Dip, If You Can

2021-07-26

by Joseph Y. Calhoun

2021-07-26

If you were waiting for a correction in stock prices to put some money to work, you got your chance last week. The Dow Jones Industrial Average was down nearly 1000 points at the low Monday and closed down 725, a loss of a little over 2%. The S&P 500 did a little better but closed down 1.5%.

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Eurodollar University’s Making Sense; Episode 89, Part 2: Let’s Crack China’s RRR Code

2021-07-24

by Jeffrey P. Snider

2021-07-24

89.2 China Warns World of (Next?) Dollar Disorder. The People’s Bank of China lowers its bank Required Reserve Ratio to get money into a slowing economy. A lowered RRR means that there aren’t enough (euro)dollars flowing into China. Why? Because there aren’t enough (euro)dollars in the world. A lower RRR is a warning for the whole world.

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