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The Fed’s QE Unwind Reaches $285 Billion
The Fed’s QE Unwind Reaches $285 Billion The “up to” begins to matter for the first time. The Fed released its weekly balance sheet Thursday afternoon. Over the four-week period from September 6 through October 3, total assets on the Fed’s balance sheet dropped by $34 billion. This brought the decline since October 2017, when […]
US Gross National Debt Jumps by $1.27 Trillion in Fiscal 2018, Hits $21.5 Trillion
US Gross National Debt Jumps by $1.27 Trillion in Fiscal 2018, Hits $21.5 Trillion But wait — these are the Boom Times! The US gross national debt jumped by $84 billion on September 28, the last business day of fiscal year 2018, the Treasury Department reported Monday afternoon. During the entire fiscal year 2018, the […]
US Dollar Refuses to Die as Global Reserve Currency — But Loses Ground
US Dollar Refuses to Die as Global Reserve Currency — But Loses Ground Chinese RMB gains, but is inconsequential as central banks remain leery. Euro hangs on. Those who’re eagerly awaiting the end of the “dollar hegemony,” or the end of the dollar as the top global reserve currency, well, they’ll need some patience, because […]
Why Rising Mortgage Rates Threaten Canada’s Banks
Why Rising Mortgage Rates Threaten Canada’s Banks Wolf Richter with Jim Goddard on This Week in Money: Interest rates will continue to rise in the US and Canada. In both countries, potential buyers face affordability issues, which puts a damper on demand. But in Canada, variable-rate and adjustable-rate mortgages dominate (while ARMs are only 6% of […]
The Fed’s Not Backing Off: Powell’s Standouts & Zingers at the Press Conference
The Fed’s Not Backing Off: Powell’s Standouts & Zingers at the Press Conference US is “on an unsustainable fiscal path, there’s no hiding from it.” I have to say, Fed Chairman Jerome Powell is a breath of fresh air when he talks, after the near-physical pain I experienced listening to his last three predecessors. I […]
Gold in the “Everything Bubble”: Effective Diversification?
Gold in the “Everything Bubble”: Effective Diversification? What do you do when nearly all asset classes are overvalued? Diversification is one of the oldest principles by which people try to hang on to their wealth, however little they might have. Don’t put all your eggs in one basket, it goes. Diversification is not designed to […]
HELOCs in the US & Canada: As “Scarred” Americans Learned Bitter Lesson, Canadians Went Nuts
HELOCs in the US & Canada: As “Scarred” Americans Learned Bitter Lesson, Canadians Went Nuts Home-equity-loan balances in Canada per capita are now 3.3 times what they were in the US during HELOC peak before it all collapsed. Home Equity Lines of Credit – the infamous HELOCs Americans used as endless ATMs to draw equity […]
Mortgage Rates Head to 6%, 10-Year Yield to 4%, Yield Curve Fails to “Invert,” and Fed Keeps Hiking
Mortgage Rates Head to 6%, 10-Year Yield to 4%, Yield Curve Fails to “Invert,” and Fed Keeps Hiking Nightmare scenario for the markets? They just shrugged. But homebuyers haven’t done the math yet. There’s an interesting thing that just happened, which shows that the US Treasury 10-year yield is ready for the next leg up, […]
Who Bought the $1.47 Trillion of New US National Debt over the Past 12 Months?
Who Bought the $1.47 Trillion of New US National Debt over the Past 12 Months? China, Japan, other foreign investors, the Fed, US government funds? Nope. Foreign private-sector investors and “foreign official” investors – central banks, governments, etc. – whittled down their holdings of US Treasury Securities by $21 billion at the end of July, […]
Meanwhile in China, Implosion of Stock-Market Double-Bubble
Meanwhile in China, Implosion of Stock-Market Double-Bubble Bubbles don’t end well for those who don’t get out in time. US tariffs and threats of more tariffs have not been particularly well received in China, which is already being rattled by corporate credit problems, quakes in the shadow banking system, a peculiar Enron-type phenomenon at provincial […]
What Can Cause the Next Mortgage Crisis in the US?
What Can Cause the Next Mortgage Crisis in the US? The soothingly low mortgage delinquency rate is a deceptive indicator: the New York Fed weighs in. Mortgage delinquencies at all commercial banks in the US inched down to 3.14% in the second quarter, the lowest since Q2 2007, according to the Federal Reserve. But after […]
The Fed’s QE Unwind Hits $250 Billion
The Fed’s QE Unwind Hits $250 Billion Here’s my math when this “balance sheet normalization” will end. In August, the Federal Reserve was supposed to shed up to $24 billion in Treasury securities and up to $16 billion in Mortgage Backed Securities (MBS), for a total of $40 billion, according to its QE-unwind plan – […]
These “Gradual” Rate Hikes Start to Add Up: US Treasury Yields up to Three Years Hit 10-Year Highs
These “Gradual” Rate Hikes Start to Add Up: US Treasury Yields up to Three Years Hit 10-Year Highs An entire generation working on Wall Street has never seen Treasury yields this high. The one-month treasury yield rose to 2.0% yesterday at the close and is at about the same level today, the highest since June […]
Housing Bubble Pops in Sydney & Melbourne, Australia
Housing Bubble Pops in Sydney & Melbourne, Australia And with impeccable timing, an immense flood of new construction. In Sydney, breeding ground for one of the world’s biggest housing bubbles, prices of single-family houses dropped 7.3% in August, compared to a year earlier. Prices of “units” — condos in US lingo — fell 2.2% year-over-year. […]
Fed Staff Delivers Intellectual Ammo for Hawkish Approach to Inflation
Fed Staff Delivers Intellectual Ammo for Hawkish Approach to Inflation “Because monetary policy acts with a lag, waiting for inflation to materialize before reacting is undesirable, particularly when economic conditions are such that outsized deviations of inflation from its target are a plausible outcome.” Let’s break the above quote apart and put it in perspective: […]
