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Tag Archives: us federal reserve
Party On: Fed Chairman Powell Capitulates to the Market
Party On: Fed Chairman Powell Capitulates to the Market FED Chairman Powell, who for a time was appearing to go rogue and stray off the beaten path of loose monetary policy paved by so many of his predecessors, has collapsed his resistance and utterly given in to the demands of the market. At a forum […]
Volatility Holds the Key to Markets in 2019
Volatility Holds the Key to Markets in 2019 Over the last two weeks, after making good on the four-rate interest hike of 2018, Fed Chairman, Jerome Powell, became more dovish to start 2019. His change in tone is worth considering because of his historical stance on reducing the amount of artificial stimulus coming from the […]
Collapse In Global M1 Signals A Worldwide Recession Has Arrived
Collapse In Global M1 Signals A Worldwide Recession Has Arrived By now everyone has seen some iteration of this chart showing that the annual change in central bank liquidity is now negative. Another way to visualize just the Fed’s balance sheet contraction is courtesy of this chart from Morgan Stanley which shows specifically which assets […]
Market Commentary: Issues 2019
Market Commentary: Issues 2019 When I began posting the CBB some twenty years ago, I made a commitment to readers: “I’ll call it as I see it – and let the chips fall where they will.” Over the years, I made a further commitment to myself: Don’t be concerned with reputation – stay diligently focused […]
A Glimpse At 2019
A Glimpse At 2019 Markets In Critical Transformation, Chaotic Behaviour Has Just Began. Our inability as market participants to properly frame market fragility and the inherent vulnerability of the financial system makes a market crash more likely, as it helps Systemic Risk go unattended and build further up. For the first time in a while, […]
We Are Entering The “Quantitative Failure” Narrative
We Are Entering The “Quantitative Failure” Narrative For a decade, the world brushed off any concerns about soaring global debt under the rug for a simple reason: between the Fed, the ECB and the BOJ, there was always a buyer of last resort, providing an implicit or, increasingly explicit backstop to bond prices, in the […]
The Crash Of The “Everything Bubble” Started In 2018 – Here’s What Comes Next In 2019
The Crash Of The “Everything Bubble” Started In 2018 – Here’s What Comes Next In 2019 In 2018, a very significant economic change occurred, which sealed the fate of the U.S. economy as well as some other economies around the globe. This change was the shift of central bank policy. The era of stimulus and […]
Kass: Follow The Money
Kass: Follow The Money The Tremor Before the Quake and the Fed’s $450 Billion Balance Sheet Reduction “The combination of rate hikes and balance sheet reductions from the Federal Reserve in 2018 sucked up global U.S. dollar liquidity and put emerging markets under immense pressure in 2018. Emerging market equities were 20-30% lower from February […]
How The Federal Reserve Quietly Bankrupted The US Pension System
How The Federal Reserve Quietly Bankrupted The US Pension System Actions have consequences. Even for the Fed. That’s not a reference to the market’s grumpy reaction to the central bank’s continued rate hikes and quantitative tightening. No. The impact of both on financial assets were as obvious as they were inexorable. To be sure, Wall […]
New Data Suggests Shocking Shale Slowdown
New Data Suggests Shocking Shale Slowdown U.S. shale executives often boast of low breakeven prices, reassuring investors of their ability to operate at a high level even when oil prices fall. But new data suggests that the industry slowed dramatically in the fourth quarter of 2018 in response to the plunge in oil prices. A […]
Monday Musings on Monetization and Markets (or Fundamentals Don’t Matter, Liquidity Does)
Monday Musings on Monetization and Markets (or Fundamentals Don’t Matter, Liquidity Does) Being I’m not an economist nor associated with any financial or investment institutions nor do I have anything for you (dear reader) to buy or sell, I have total freedom to say what I please and freedom to share what I see. In that spirit, I […]
The Fed, China, And The Markets
The Fed, China, And The Markets Amid market volatility and continued downside surprises in global growth, investors are focusing on the Fed and China. Regarding the Fed, the issue is whether and when it could signal potential changes in balance sheet normalisation (as it has on the policy rate path). On China, the question is […]
Weekly Commentary: Global Markets’ Plumbing Problem
Weekly Commentary: Global Markets’ Plumbing Problem “Goldilocks with a capital ‘J’,” exclaimed an enthusiastic Bloomberg Television analyst. The Dow was up 747 points in Friday trading (more than erasing Thursday’s 660-point drubbing) on the back of a stellar jobs report and market-soothing comments from Fed Chairman “Jay” Powell. December non-farm payrolls surged 312,000. The strongest […]
The Ugly Truth
The Ugly Truth For years critics of central bank policy have been dismissed as negative nellies, but the ugly truth is staring us all in the face: Market advances remain a game of artificial liquidity and central bank jawboning and not organic growth and now the jig is up. As I’ve been saying for a […]
Fed’s Balance Sheet Reduction Reaches $402 Billion
Fed’s Balance Sheet Reduction Reaches $402 Billion The QE unwind has started to rattle some nerves. For the past two months, the sound of wailing and gnashing of teeth about the Fed’s QE unwind has been deafening. The Fed started the QE unwind in October 2017. As I covered it on a monthly basis, my […]
