Tag Archive: Markets

Deja Vu: Treasury Shorts Meet Treasury Shortages

Investors like to short bonds, even Treasuries, as much as they might stocks and their ilk. It should be no surprise that profit-maximizing speculators will seek the best risk-adjusted returns wherever and whenever they might perceive them.

Read More »

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.

Read More »

Three Things About Today’s UST Sell-off, Beginning With Fedwire

Three relatively quick observations surrounding today’s UST selloff.1. The intensity. Reflation is the underlying short run basis, but there is ample reason to suspect quite a bit more than that alone given the unexpected interruption in Fedwire yesterday.

Read More »

Nine Percent of GDP Fiscal, Ha! Try Forty

Fear of the ultra-inflationary aspects of fiscal overdrive. This is the current message, but according to what basis? Bigger is better, therefore if the last one didn’t work then the much larger next one absolutely will. So long as you forget there was a last one and when that prior version had been announced it was also given the same benefit of the doubt.

Read More »

For The Dollar, Not How Much But How Long Therefore How Familiar

Brazil’s stock market was rocked yesterday by politics. The country’s “populist” President, Jair Bolsonaro, said he was going to name an army general who had served with Bolsomito (a nickname given to him by supporters) during that country’s prior military dictatorship as CEO of state-owned oil giant Petróleo Brasileiro SA. Gen. Joaquim Silva e Luna is being installed, allegedly, to facilitate more direct control of the company by the federal...

Read More »

What Might Be In *Another* Market-based Yield Curve Twist?

With the UST yield curve currently undergoing its own market-based twist, it’s worth investigating a couple potential reasons for it. On the one hand, the long end, clear cut reflation: markets are not, as is commonly told right now, pricing 1979 Great Inflation #2, rather how the next few years may not be as bad (deflationary) as once thought a few months ago.

Read More »

Weekly Market Pulse – Real Rates Finally Make A Move

Last week was only four days due to the President’s day holiday but it was eventful. The big news of the week was the  spike in interest rates, which according to the press reports I read, “came out of nowhere”. In other words, the writers couldn’t find an obvious cause for a 14 basis point rise in the 10 year Treasury note yield so they just chalked it up to mystery.

Read More »

Eurodollar University’s Making Sense; Episode 46; Part 3: Bill’s Reading On Reflation, And Other Charted Potpourri

46.3 On the Economic Road to NothingGoodVilleRecent, low consumer price inflation readings combined with falling US Treasury Bill yields are cautionary sign posts that say this reflationary path may not be the road to recovery but a deflationary cul-de-sac.

Read More »

Two Seemingly Opposite Ends Of The Inflation Debate Come Together

It’s worth taking a look at a couple of extremes, and the putting each into wider context of inflation/deflation. As you no doubt surmise, only one is receiving much mainstream attention. The other continues to be overshadowed by…anything else.

Read More »

Uncle Sam Was Back Having Consumers’ Backs

American consumers were back in action in January 2021. The “unemployment cliff” along with the slowdown and contraction in the labor market during the last quarter of 2020 had left retail sales falling backward with employment. Seasonally-adjusted, total retail spending had declined for three straight months to end last year.

Read More »

The Endangered Inflationary Species: Gazelles

Nevada is, by all accounts and accountants, in rough shape. Very rough shape. An economy overly dependent upon a single industry, tourism, in this case, is a disaster waiting to happen should anything happen to that industry. Pandemic restrictions, for instance.

Read More »

Permanent Jobs And Permanent Job Losses

Even the feds haven’t been able to keep up. Without the government having taken over student loans in the wake of 2008-09’s Great “Recession”, there’d have been almost no additional consumer credit extended during the decade since.

Read More »

Even The People ‘Printing’ The ‘Money’ Aren’t Seeing It

Everyone in Europe has long forgotten about what was going on there before COVID. First, an economy that had been stuck two years within a deflationary downturn central bankers like Italy’s new recycled top guy Mario Draghi clumsily mistook for an inflationary takeoff. Both the inflation puzzle and ultimately a pre-pandemic recession have taken a back seat to everything corona.Whereas Draghi spent those years howling for inflationary conditions...

Read More »

Politics Get Weird, Markets Don’t Care

A mob, led by a shirtless man wearing a Viking helmet, stormed the Capitol building a couple of weeks ago and five people died before order was restored. A man from upstate New York sat in a Senator’s office and smoked a joint. Another roamed the halls of Congress with a Confederate flag.

Read More »

Consumers, Producers, and the Unsettled End of 2020

The months of November and December aren’t always easily comparable year to year when it comes to American shopping habits. For a retailer, these are the big ones. The Christmas shopping season and the amount of spending which takes place during it makes or breaks the typical year (though last year, there was that whole thing in March and April which has had a say in each’s final annual condition).

Read More »

If the Fed’s Not In Consumer Prices, Then How About Producer Prices?

It’s not just that there isn’t much inflation evident in consumer prices. Rather, it’s a pretty big deal given the deluge of so much “money printing” this year, begun three-quarters of a year before, that consumer prices are increasing at some of the slowest rates in the data.

Read More »

They’ve Gone Too Far (or have they?)

Between November 1998 and February 1999, Japan’s government bond (JGB) market was utterly decimated. You want to find an historical example of a real bond rout (no caps nor exclamations necessary), take a look at what happened during those three exhilarating (if you were a government official) months.

Read More »

There’s Always A First Time

Is it a race against time? Or is it trying to set aside today so as to focus entirely on a specific kind of tomorrow? It’s easy to do the latter especially when today is what it is; you can’t change what’s already gone on.

Read More »

Seizing The Dirt Shirt Title

In mid-December 2019, before the world had heard of COVID, China’s Central Economic Work Conference had released a rather startling statement for the world to consume. In the West, everything was said to be on the up. Central banks had responded, forcefully, many claimed, more than enough to deal with that year’s “unexpected” globally synchronized downturn.

Read More »

Consumers, Too; (Un)Confident To Re-engage

There is a lot of evidence which shows some basis for expectations-based monetary policy. Much of what becomes a recession or worse is due to the psychological impacts upon businesses (who invest and hire) as well as workers being consumers (who earn and then spend).

Read More »