federal funds

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 [...]

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 [...]

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 [...]

Dollar Destruction Potential: From China ‘Outflows’ To The FOMC Considering QE5

By |2019-07-10T17:53:14-04:00July 10th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Tucked away in a quiet little corner of the BIS publication library, a study was published in the organization’s September 2015 Quarterly Review. One of the biggest mysteries of that time was Chinese “capital flight.” It was breathtaking, and it would only get worse. What was really going on? Many if not most mainstream stories [...]

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 [...]

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 [...]