The following note will appear in the Treasury Market Strategy section of our April Global Fixed Income Monthly that goes to publication today. I thought I would send it now as a preview. Good luck trading! The coming inflation addition – The past month felt like almost a full business cycle. The events in Japan […]
Here are the current distances from the February highs in equities and yields US 5s – 7bps below US 10s – 15bps below US30s – 10bps below Bunds – 15bps ABOVE Spoo – 0.5% below DAX – 3% below There was plenty of rumbling about a month ago about how we had seen the high […]
We have moved from “strong vigilance” to “monitor very closely”. It’s certainly a softer statement than many (including myself) thought. Euro off and Bunds higher seem the obvious first response. But that said, the ECB is not shy about stating that interest rates remain low “across the entire maturity spectrum”. Even these guys are saying […]
The single most important market event this week will be JCT’s press conference tomorrow morning. Will he say “strong vigilance” again? Will it be just “vigilance”? Or will we be treated to some new language concept just to obfuscate things further? Also, we will get to see if the rate band widens from the current […]
For those that never saw the movie Napoleon Dynamite, today’s title may be confusing. This movie is an American “cult classic” about some quirky teenagers (Napoleon and Pedro) that run a campaign for high school class president against the very popular Summer Wheatley. It’s an underdog story with some highly entertaining dark and sublime humor. […]
I have been away from the screens since Tuesday last week. It was quite nice to get a little R and R time on the powdery slopes before my marketing trip through Paris, London, Stockholm and Madrid commences this week. It was also nice to step away from the hysterical panic that ensued in markets […]
If the US Treasury issued overnight T-bills and bought 30 year MBS it would be no different than the Fed buying 30 year MBS for cash and paying interest on excess reserves. When it comes to balance sheet expansion (or contraction) at the zero interest rate bound, Treasury and Fed policies are EXACTLY the same. […]
I spoke with a number of economists whose opinion I value highly since the PPI and CPI releases last week. These are folks who were NOT looking for any material upside risks to inflation in the coming quarters (or years frankly). Their song seemed to be changing after the data releases. And rightfully so I […]
Both Europe and the US had debt bubbles which popped. Banks on both sides of the Atlantic do not hold enough capital to cover the losses associated with the poor lending decisions from the previous decade. The folks with 200 LTVs in Las Vegas are no different than Greek or Portuguese taxpayers. Neither are going […]
I have been fortunate enough to speak at a conference out in Las Vegas over St. Patrick’s Day and the NCAA tipoff party this week. At the conference we have discussed and debated the global crisis environment for hours on end -but in the bubble that is the rest of Las Vegas one sees and […]