Category Archives: Credit

Major Holders Of The U.S. Corporate Bond Market

Summary Bullets The size of the U.S. corporate bond market, as measured by the Fed’s Flow of Funds, totals $13.1 trillion at the end of Q1 2018 It includes $10.2 trillion of domestic issues and $2.8 trillion of foreign issues … Continue reading

Posted in Bonds, Credit, Uncategorized | Tagged , | 2 Comments

Prepare For Much Higher Long-Term Rates

There has been a huge drain of liquidity from the U.S. Treasury market over the past few years, and may signal a structural change to how the United States finances budget deficits. The government will always find a way to … Continue reading

Posted in Bonds, Charts, China, Credit, Geopolitical, Interest Rates, Sovereign Debt, Uncategorized | Tagged , , , | 36 Comments

COTD: Corporate Debt

No lack of supply/issuance in the corporate debt market.   No shortage of demand either. Lots of nuances in interpreting data, however.  First, much of debt going to financial engineering, i.e., stock buybacks.  Some of the supply is borrowing against capital … Continue reading

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COTD: Venezuela Oil Production (t/bpd)

Ergo (among other things), this: There is some minimum threshold level of reserves most central banks will not cross and will resort to various policies to protect and ration foreign exchange reserves, including devaluation, import restrictions, capital controls, selective default, … Continue reading

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The Lehman legacy: Lessons learned? – Economist

Five years on from the collapse of Lehman Brothers and the advent of the global debt crisis, our correspondents assess whether the world economy is sufficiently protected from future shocks.   – The Economist (click here if video is not observable)

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Capitano Crunch: Europe’s Collapsing Monetary Aggregates

Here are some great pictures from Credit Suisse illustrating what’s happening in the European monetary sector.  The monetary aggregates have been collapsing at a greater pace than 2008/09  as banks have been cutting credit and shrinking their balance sheets to … Continue reading

Posted in Black Swan Watch, Credit, Euro, Monetary Policy, Policy, Sovereign Risk, State and Local Government | Tagged , , , | 4 Comments

China’s Deflating and ‘Eerily Similar’ Housing Bubble

Wow!  Check out this. In January we compared the U.S. and China stimulus, In the U.S., the central bank printed and created money through the expansion of its balance sheet.  In China, the government pressured the  banks to create money … Continue reading

Posted in Black Swan Watch, China, Commodities, Credit, Sovereign Debt, Sovereign Risk | Tagged | 2 Comments

The Biggest Bubble in History?

We are baffled by the analysis of the analyst community, some, of which, are not so analytical.  They say that  Europe’s fundamental problem is that it  has a central bank which is unwilling to monetize sizeable debt maturities which bondholders … Continue reading

Posted in Black Swan Watch, Bonds, BRICs, Budget Deficit, Commodities, Credit, Currency, Euro, Monetary Policy, PIIGS, Sovereign Risk, State and Local Government | Tagged , , , , , , , | 17 Comments

The Creeping and Coming Eurozone Credit Crunch

Here’s a very informative chart via Morgan Stanley showing the deterioration in the Eurozone’s key credit indicators.  Banks will no doubt sell assets, at least in part, as a way to meet their required capital targets. During the 1997 Asian … Continue reading

Posted in Black Swan Watch, Credit, Economics, Euro, Sovereign Debt, Sovereign Risk | Tagged , , | 1 Comment

Most Important Spread in the World

Given the bank recapitalization plan announced over the weekend,  the France national government may be on the hook to help recapitalize and backstop its banking system.  The markets will be full of noise in the next few days and we … Continue reading

Posted in Credit, Euro, Monetary Policy, Sovereign Debt, Sovereign Risk | Tagged , | 2 Comments