bank reserves

The Fingerprints of Bumbling (China)

By |2019-08-21T17:46:46-04:00August 21st, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

For a cabal of superpatient supergeniuses, the Chinese tend to play with fire quite often. According to many, the Communists have perfected the art of technocracy and are merely waiting out the impetuously free West. The dollar system will destroy itself (there’s the kernel of truth) allowing a perfectly positioned China to swoop in and [...]

Maybe The Grand Celebration For The Early End of QT Starts Tomorrow?

By |2019-07-31T18:13:09-04:00July 31st, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Perhaps too much attention was given to “one-and-done”, the knee-jerk disappointment over what everybody is saying was not enough “dovishness.” And while that may have been true as it relates to main star of the puppet show, rate cuts, the FOMC actually did deliver better theater at least with a secondary character. The latest official [...]

The Fallacious Doctrine of ‘Abundant Reserves’

By |2019-07-22T16:44:42-04:00July 22nd, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It wasn’t the first time it had happened, but to that point it did suggest something had changed. Things were going wrong and afterward the very idea of wrong took on an even more disastrous nature. On Monday, September 29, 2008, the Dow Jones Industrial Average plummeted nearly 778 points. It was the largest single [...]

The PBOC’s Involuntarily Enormous Bet

By |2019-07-19T17:25:27-04:00July 19th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Central bankers are not nimble traders. By their very bureaucratic nature, they leave big muddy footprints all over markets. Sometimes that is by design, a show of force to scare some evil speculators into going straight. Other times, it just can’t be helped. The way it works in China, the autocratic structure doesn’t leave much [...]

How To Properly Address The Unusual Window Dressing

By |2019-07-02T12:16:31-04:00July 2nd, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Unable to tackle effective monetary requirements, bank regulators around the world turned to “macroprudential” approaches in the wake of the Global Financial Crisis. It was mostly public relations, a way to assure the public that 2008 would never be repeated. A whole set of new rules was instituted which everyone was told would rein in [...]

The RHINO Conundrum of UFO Non-believers

By |2019-06-26T17:14:42-04:00June 26th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In 2005, Ben Bernanke kicked up quite a bit of controversy, or what qualifies as drama in the dry space of top-level Economics. It was Alan Greenspan who really started the conversation, practically begging for someone to offer an answer. Long-term interest rates were not behaving the way they were supposed to; the maestro’s true [...]

The (Fake) Recovery Behind Record Low Bund Yields

By |2019-06-07T16:09:13-04:00June 7th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

No Federal Reserve Chairman under its current configuration can say QE didn’t work. Those words will never pass the lips of whoever it may be occupying that position. The world’s bond markets, however, are trying very hard to make this resistance as uncomfortable as possible. The one thing central bankers here along with everywhere else [...]

China’s Big Stimulus

By |2019-05-22T11:26:25-04:00May 22nd, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Earlier this month, the People’s Bank of China (PBOC) reduced the percentage of liquid reserves some banks are required to hold. Effective May 15, the Chinese central bank estimated that the policy change would release about RMB 280 billion into the system. This RRR discount, however, was only applied to small and medium-sized banks. The [...]

Chinese Treasuries and FOMC Policies, The Big Number That Just Turned Against Jay Powell

By |2019-05-08T16:38:30-04:00May 8th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In a period when weird and unusual are commonplace, it was one of the more noteworthy and interesting outliers. Late in August 2010, a media report attributed to Hong Kong’s Ming Pao news agency suggested Zhou Xiaochuan was on the run. Supposedly, the Governor for the People’s Bank of China, the country’s central bank, was [...]

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