Thinking
Why The Fed Will Go Negative
Until now, the US has avoided the negative rate phenomenon that has become embedded in the monetary and fiscal environment of Europe and Japan. To recycle and parody parts of a phrase that former Fed Chairman Ben Bernanke used almost twenty years ago reflecting on deflation in Japan – “It (Negative […]
Preparing For Inflation: What Can We Do If The Misery Index Turns Up?
Unfortunately for investors, the shocks from the coronavirus are following the horror script of a vicious unwind of financial asset prices. Despite the unprecedented stimulus from global Central BanksCSFL and governments, the situation is being perceived by most investors as getting worse, not better. What happens next? What can we […]
Helicopter Money Is Here!
Finally, at long last, the market has forced the administration to do what it had to do: Send money to the people via a check in the mail, of course, assuming Congress approves this fiscal bazooka. The Treasury secretary announced this morning that he would propose a $1,000 check be […]
The Fed Cut 100 And The Market Freaked Out – Here’s Why
Sunday afternoon, the Federal Reserve cut interest rates by 1% to almost zero in a surprise move, and as Chair Powell started to speak, the equity futures markets went limit down quickly, followed by an even more precipitous fall at the open Monday morning. What happened? Here are a few reasons […]
Broken Markets: Notes From The Trenches Of Market Turbulence
The current financial crisis is the fifth one I have experienced. It is not very different than the other four. As usual, markets went from being completely complacent to completely panicked in a matter of days. In January, I wrote a piece in this forum about “market avalanches”, and how sunny […]
The Incoming Flood Of Japanese Money Into US Treasury Bonds
Even with global stocks reaching new record highs almost daily, the money flowing into global bond markets and falling yields has been the more surprising fact this year. As global Central Banks cut rates in the face of the coronavirus, or flood markets with liquidity, much of the cash is […]
TSLA: “Beauty Happens”
The stunning rise of Tesla (“TSLA”) stock price in the last three months, has made Tesla fans (yours truly being one of them) jump for joy, while creating, as Elon Musk promised, the “short burn” of the century for the “haters”. Whether or not you like Mr. Musk or his grandiose […]
Racing Ahead Of Market Avalanches!
I am sure that like me, the reader of this column was inundated between the beginning of November and the end of December by letters and economic outlooks from all variety of financial pundits. Let me be the first one to offer my condolences, since it is highly likely that […]
Fixing Major Plumbing Problems With A Plunger: Why The Repo Problem Is Deeper Than It Appears
A lot has been written in the news recently about the repo problem. A couple of days ago overnight funding rates spiked to 10%, which has been unheard of since the financial crisis. How can it be that with all the money being printed by global central banks, dealers are […]
Who In The World Is Buying All These (Low and Negative Yielding) Bonds?
A lot has been written recently about negatively yielding bonds in the press. In full disclosure, this author has been writing about negatively yielding bonds for almost five years, though what seemed like a conundrum in the beginning has become all too normal for professionals today. But now that this […]
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