Tag Archives: Monetary Policy

Reflexivity And Why The Fed Must Sell The Long End

The yield curve is flattening like a pancake.   Tightening cycles tend to do that. Furthermore, the effective float of 10-year and longer U.S. notes and bonds is relatively small and greatly distorts the bond market signal.   We have written … Continue reading

Posted in Bonds, Economics, Monetary Policy, Uncategorized | Tagged , , | 20 Comments

The Fed’s Overnight Reverse Repurchase Agreements

Interesting piece on Barry Ritholz’  Big Picture blog yesterday,  Implementing Monetary Policy: Perspective from the Open Market Trading Desk.    An excellent follow-up to our last week’s post, Orwellian Monetary Policy. Recall we noted the structural change in monetary policy and … Continue reading

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Fed Ownership of Yield Curve and Balance Sheet Reduction

Here you have it, folks, a one stop chart. The chart below shows the total outstandings of Treasury bonds and notes,  the Fed ownership of the total maturities and percentage of outstandings in each year of maturity (note, the data … Continue reading

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The Broken Bond Market

The Fed tightens on Wednesday and bonds rally.  What the hay? GaveKal, Jeff Gundlach,  and Jim Bianco nailed it in that every spec and their mother are/were short 10-year Treasuries. Source: Quandl (see here for interactive chart) But this is … Continue reading

Posted in Bonds, Monetary Policy, Sovereign Debt, Sovereign Risk | Tagged , , , , , | 35 Comments

U.S. Banks Primed And Ready To Roll – Expect the Unexpected

We’ve been busy crunching numbers on the consolidated balance sheet of U.S.-chartered depository institutions and comparing their mix of assets relative to their pre-crisis levels. The large U.S. banks begin reporting earnings on Friday. The Coming Credit Led Expansion Our … Continue reading

Posted in Economics, Monetary Policy, Uncategorized | Tagged , , , | 2 Comments

How to Become a Trillionaire and Other Thoughts

Grab one of these: Careful what you wish for central bankers and fiscal policy makers.  Though we don’t see signs of “rollover risk” in any of the G5 or G20, it’s all about confidence and you know what Joe said about … Continue reading

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Looser policy but a stronger euro – FT

The European Central Bank has sent bond yields tumbling through its attempts to stimulate the eurozone economy. Dan McCrum explains why, compared with the US, policy is not as loose as it may seem, and how the euro could strengthen … Continue reading

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The constraints on cheap money – FT

John Authers explains a sharp sell-off in bank stocks and one-sided foreign exchange trading as the Japanese yen rises. For more video content from the Financial Times, visit http://www.FT.com/video (click here if video is not observable)  

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Money flows again to the US – FT

John Authers reports on how easier monetary policy from China helped drive a further rebound in world stock markets. The biggest beneficiary seems to be the US. For more video content from the Financial Times, visit http://www.FT.com/video (click here if … Continue reading

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China pumps up liquidity – FT

Worries over China’s economy pushed shares into bear territory last week, prompting more liquidity from the People’s Bank and fresh market volatility. Diana Choyleva, chief economist at Lombard Street Research, explains to the FT’s John Authers why China is taking … Continue reading

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