EFF

Real Liquidity Cuts Across Many Boundaries; So Does The Lack of It

By |2019-08-02T12:59:58-04:00August 2nd, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Things that happen in one place happen in every place. That’s been the second hardest thing to get people to realize. The first is that central banks are not central. And the reason they aren’t is because of this other factor. It truly is a global system and it’s made that way by its very [...]

Does A Second Floor Make An Effective Ceiling?

By |2019-07-22T17:06:42-04:00July 22nd, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

For central bankers like Bill Dudley and Ben Bernanke, the Global Financial Crisis was a godsend. So much had been a disaster it was hard to pin down specific failures. Where does one begin? Practically everything went wrong, so take your pick. The Financial Crisis Inquiry Commission (FCIC) did its part pointing the finger at [...]

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 [...]

What Has Markets Spooked? Probably Something To Do With That Huge Offshore Dollar Hole

By |2019-07-12T18:32:36-04:00July 12th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

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 [...]

Federal Funds Is Not Falling With The Rest of Them

By |2019-06-24T18:57:04-04:00June 24th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s difficult a lot of times to easily and succinctly describe what’s going on inside a monetary system that; 1. Spans the entire world, easily jumping across if not erasing geographical boundaries; 2. Is located in the shadows, leaving us with no direct data or statistics; 3. Often works in a dizzying array of complexities. [...]

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

By |2019-06-19T16:27:39-04:00June 19th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

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 [...]

Copper And Oil Walked Out On The Last Puppet Show

By |2019-06-05T16:07:26-04:00June 5th, 2019|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Where have you gone, green shoots? The Fed turned dovish, a bunch of transitory factors, and, above all, so much Chinese stimulus. That’s what got everyone through the winter. Markets were truly harsh to end 2018, a sharp slap in the face after all year the unemployment rate. One of the big ones that seemed [...]

The T-bill Lie: Even More Completely Full of It

By |2019-05-03T16:37:34-04:00May 3rd, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

When all this federal funds business started, the effective federal funds (EFF) rate was pretty well established at 16 bps above the RRP “floor.” It had been that way, consistently, all throughout Reflation #3, all throughout 2017. So consistent, that dependable spread was a very solid indication of reflation. As of yesterday, EFF was…16 bps [...]

Not Only No Labor Shortage, Latest Labor Market Data Is Closer to Rate Cuts

By |2019-05-02T16:03:27-04:00May 2nd, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Yesterday, the FOMC altered its view of household spending and business capex. It wasn’t a huge difference, they never are. Figuratively, these sorts of downgrades are little by little even though if things were ever to go the right way the language upgrades wouldn’t be subject to so much reservation. There isn’t much in the [...]