The Speed of Sour: LIBOR Now Inverted, Too

By |2019-06-25T17:09:14-04:00June 25th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Last week, for the first time since February 2008, the LIBOR curve inverted. The 3-month tenor has been on the move downward for some time. The 1-month rate has been gentler in its slope. Last Thursday, the two finally crossed. As unnatural as inversion in the UST curve or elsewhere, it’s another sign of imminent [...]

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. [...]

Global Doves Expire: Fed Pause Fizzles (US Retail Sales)

By |2019-05-15T11:29:03-04:00May 15th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Before the stock market’s slide beginning in early October, for most people they heard the economy was booming, the labor market was unbelievably good, an inflationary breakout just over the horizon. Jay Powell did as much as anyone to foster this belief, chief caretaker to the narrative. He and his fellow central bankers couldn’t use [...]

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 [...]

China (Partly) Answers For Why Markets Are Forecasting Even More Powell Rate Cuts

By |2019-03-27T17:40:13-04:00March 27th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

On February 7, the 3-month LIBOR rate (US$) fell sharply. Traders were, as various media outlets reported, stunned. All sorts of excuses were issued, the goal of them cumulatively to deny your lying eyes. Falling LIBOR couldn’t have been the market, especially eurodollar futures, anticipating a rate cut because these same people had been saying [...]

Downturn Is Everywhere

By |2019-03-22T12:47:15-04:00March 22nd, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Europe is a total mess, no one can (honestly) argue otherwise. But that’s just Germany and France, right? PMI’s in those countries were a disaster. Those reported for the US weren’t really all that bad. Weaker, sure, hardly the obvious sinking especially when compared to German manufacturers. IHS Markit’s flash US Manufacturing Index for March [...]

LIBOR Was Expected To Drop. It Dropped. What Might This Mean?

By |2019-02-07T16:34:24-05:00February 7th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Everyone hates LIBOR, until it does something interesting. It used to be the most boring interest rate in the world. When it was that, it was also the most important. Though it followed along federal funds this was only because of the arb between onshore (NYC) and offshore (mainly London, sometimes Caymans) conducted by banks [...]

JP Morgan Steps Up Again

By |2008-10-17T17:57:04-04:00October 17th, 2008|Economy|

In my post Libor Too High or Fed Funds Too Low?, I suggested a way that the market might begin to function again: How is the Fed going to get out of this? The only way I can see to get this market functioning again is for some large bank to offer to lend a [...]

LIBOR Too High or Fed Funds Too Low?

By |2008-10-16T17:30:42-04:00October 16th, 2008|Economy|

The WSJ Market Beat Blog has a post called the LIBOR disconnect: The question is, where will the money come from? The short-term funding needs of banks have largely been satisfied in the overnight and short-term lending markets, where banks borrow from each other, using unsecured loans, paying the London interbank offered rate, or LIBOR, [...]


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