interest rate swaps

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 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 [...]

What If There Was No Punchbowl In The First Place?

By |2019-05-30T18:00:11-04:00May 30th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The celebration was premature. As usual, people were extrapolating reflation into recovery. Getting relatively better after being really bad is not the same as truly healing. Reflation is a necessary but by itself insufficient condition for normalcy. The latter requires the former as a first step and then needs enough momentum (of opportunity) to carry [...]

Chart (Deluge) Of The Month

By |2019-05-24T16:44:54-04:00May 24th, 2019|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

In Europe, the ECB’s minutes for its April 2019 meeting claimed: Financial market developments, which were typically more forward looking, were more upbeat. In the US, the Federal Reserve’s minutes for its April 2019 meeting claimed: Participants noted that even if global economic and financial conditions continued to improve, a patient approach would likely remain [...]

Curves Have Pointed The Way, And It’s The Way They Still Point

By |2019-05-10T16:35:07-04:00May 10th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In the middle of last November, when the Dallas branch of the Federal Reserve convened a conference on “global perspectives”, ironically, its officials were in a very good mood. The institution’s Chairman, Jay Powell, invited to speak at the gathering spelled out exactly why. Central bankers since Greenspan have made a habit of trying to [...]

The Only Good From IOER: Teasing Out The Shadow Money Costs That Do Matter

By |2019-04-26T16:57:14-04:00April 26th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

You don’t always have to understand the minute details behind these things to gain a sense of what they mean. I’m talking about things like negative swap spreads and related. From the textbook view, a negative spread makes no sense at all. On the surface, it seems to suggest the market thinks financial counterparties are [...]

Labor Slowdown Already; Another Account Falls In Line of May 29

By |2019-04-11T16:36:54-04:00April 11th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

May 29. May 29. May 29. It keeps showing up everywhere. Not only does it appear as an inflection on so many important market charts, we keep finding it in economic accounts, too. There is so much to corroborate what can only have been a real and striking event. This contrasts, of course, with the [...]

Nothing To See Here, It’s Just Everything

By |2019-01-02T17:20:55-05:00January 2nd, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The politics of oil are complicated, to say the least. There’s any number of important players, from OPEC to North American shale to sanctions. Relating to that last one, the US government has sought to impose serious restrictions upon the Iranian regime. Choking off a major piece of that country’s revenue, and source for dollars, [...]

Big Dig Derivatives Disaster

By |2008-11-26T14:12:36-05:00November 26th, 2008|Economy|

The Big Dig continues to wreak havoc with the Mass. state budget (via the WSJ): The financial crisis is causing a big row in Massachusetts over tolls. The Massachusetts Turnpike Authority, already the object of local scorn for cost overruns incurred in the infamous Big Dig road project, faced further public wrath in recent weeks [...]