strong worldwide demand for safe assets

Eurodollar University: Epilogue 2, TIC & The Evidence For The Collateral Bid For Bonds

By |2019-04-16T13:09:10-04:00April 16th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

They said May 29 was Italians. I say it was collateral. Offshore repo collateral, to be specific. Because we keep seeing May 29 show up everywhere, what happened that day matters. Getting the story straight allows us to properly analyze the craziness in between then and now. From that, we hope to get a better [...]

Not Surprisingly, It Wasn’t Italy

By |2019-02-25T16:18:40-05:00February 25th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s so obscure now, I actually had to go back and reread what was going on there at the time. On May 29, the mainstream consensus was how Italian populists were screwing up Europe. Global bond markets were supposed to be selling off, massacred as global recovery took hold. Instead, worldwide the most liquid, safe [...]

FOMC Minutes: The New Narrative Takes Shape

By |2019-02-20T16:40:08-05:00February 20th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Nothing the Fed did today, or has done up to today, has changed the curves. Eurodollar futures and UST’s, they are both still inverted. The former sharply inverted. The only thing that has changed since early January is the narrative – and not in a charitable way. It is treated as a positive when it [...]