money dealers

The Frights of Repo-ween: Technical Things and Scaredy-cats

By |2019-10-31T20:50:18-05:00October 31st, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s not the level of bank reserves. It never was. QT was always a distraction. As I’ve said from the very beginning, the same thing the Fed’s researchers (rather than top policymakers) will say you if you ask them, the level of bank reserves only tells us what the Fed is doing. It does not, [...]

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

By |2019-05-03T16:37:34-05:00May 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 [...]

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

By |2019-04-26T16:57:14-05:00April 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 [...]

Tantrums and Tapers, TBA’s and Mortgage Rates

By |2019-01-22T16:10:48-05:00January 22nd, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

To be an interested observer of things in the summer of 2013 was to be awash in the awareness of so many contradictions packed into one little piece of history. Forward guidance, for one, recognized the effects of markets. If QE was really effective, interest rates would rise not fall in anticipation of those positive [...]

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