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Tag Archives: credit bubble bulletin
Weekly Commentary: Turkey (Nudged Over the Cliff)
Weekly Commentary: Turkey (Nudged Over the Cliff) The Turkish lira sank 13.7% in chaotic Friday trading. The lira’s 21.0% “worst week in 17 years” collapse pushed y-t-d losses to 41.1%. Turkish 10-year yields spiked to almost 21%, before retreating somewhat. After beginning the year at 155, Turkey sovereign credit default swaps (CDS) spiked 166 bps […]
Weekly Commentary: “Periphery to Core Crisis Dynamics”
Weekly Commentary: “Periphery to Core Crisis Dynamics” The renminbi traded at 6.8935 in early-Friday trading, with intensified selling pushing the Chinese currency to its lowest level (vs. the $) since May 26, 2017. The People’s Bank of China (PBOC) was compelled to support their currency, imposing a 20% reserve requirement on foreign-exchange forward contracts (raising […]
Weekly Commentary: Intimidate Nobody
Weekly Commentary: Intimidate Nobody Strangely perhaps, but late in the week my thoughts returned to James Carville’s 1992 comment: “I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the […]
Weekly Commentary: $247 Trillion and (Rapidly) Counting
Weekly Commentary: $247 Trillion and (Rapidly) Counting I chronicled mortgage finance Bubble excess on a weekly basis. Relevant data were right there in plain sight, much of it courtesy of the Federal Reserve. Yet only after the Bubble burst did it all suddenly become obvious. Flashing warning signs were masked by manic delusions of endless […]
Weekly Commentary: BIS Annual Economic Report (for posterity)
Weekly Commentary: BIS Annual Economic Report (for posterity) With attention focused on unfolding trade wars and summer vacations, the release of the Bank of International Settlement (BIS) Annual Report garnered scant notice (with the exception of Gillian Tett’s Thursday FT article, “Holiday Trading Lull Flashes Red for Financiers”). From the BIS: “It is now 10 […]
Weekly Commentary: Performance Chase
Weekly Commentary: Performance Chase The Nasdaq Composite, Nasdaq 100, small cap Russell 2000, Value Line Arithmetic and the NYSE Arca Biotechnology were among U.S. indices trading to all-time highs during Wednesday’s session. In the real world, there is escalating risk of a destabilizing global trade war. The Shanghai Composite sank 4.4% this week to two-year […]
Weekly Commentary: The Great Fallacy
Weekly Commentary: The Great Fallacy A big week in the world of monetary management: The Federal Reserve raised rates 25 bps, the ECB announced plans to wind down its historic QE program, and the Bank of Japan clung to its “powerful monetary easing” inflationist scheme. A tense People’s Bank of China left rate policy unchanged, […]
Weekly Commentary: Q1 2018 Z.1 Flow of Funds
Weekly Commentary: Q1 2018 Z.1 Flow of Funds The first-quarter 2018 Z.1 “flow of funds” report can be viewed in two ways. From one perspective, key conventional data are un-extraordinary. Household debt expanded at a 3.3% rate during the quarter, down from Q4’s 4.6%. Home Mortgage borrowings slowed from 3.4% to 2.9%. Total Business debt […]
Weekly Commentary: Italian Drama
Weekly Commentary: Italian Drama As I see it, cracks are opening in the greatest Bubble of all time. Serious fissures have developed in EM, Europe and China. Meanwhile, the stimulus-driven U.S. economic boom runs unabated. Global fragilities place downward pressure on U.S. market yields, while faltering Bubbles elsewhere stoke (self-reinforcing) outperformance – and speculative excess […]
Weekly Commentary: Crisis Watch
Weekly Commentary: Crisis Watch Where to begin? Contagion… The Argentine peso dropped another 5.0% this week, bringing y-t-d losses to 23.7%. The Turkish lira fell 3.9%, boosting 2018 losses to 15.4%. As notable, the Brazilian real dropped 3.7% (down 11.5% y-t-d), and the South African rand sank 4.0% (down 3.0% y-t-d). The Colombian peso fell […]
Weekly Commentary: Disequilibrium
Weekly Commentary: Disequilibrium Much to the consternation of our allies, President Trump withdraws from the Iran nuclear deal. WTI crude adds another 1.5% (up 17% y-t-d) this week to the high since November 2014. Iran and Israel moved closer to direct military confrontation. With even 40% rates unable to staunch the bleeding, a stunned Argentine […]
Weekly Commentary: Old Roach Motel
Weekly Commentary: Old Roach Motel One hundred and six months. The current expansion, having emerged in the aftermath of the collapse of the mortgage finance Bubble, is now the second-longest on record (lagging only the 120-month 1990’s Bubble period). The unemployment rate dropped to 3.9% last month, the lowest level since the 3.8% print in […]
Weekly Commentary: Nobody Thinks It Would Happen Again
Weekly Commentary: Nobody Thinks It Would Happen Again WSJ: “Ten Years After the Bear Stearns Bailout, Nobody Thinks It Would Happen Again.” Myriad changes to the financial structure have seemingly safeguarded the financial system from another 2008-style crisis. The big Wall Street financial institutions are these days better capitalized than a decade ago. There are […]
Weekly Commentary: Cracks
Weekly Commentary: Cracks After posting an inter-week high of 25,800 on Tuesday, the DJIA then dropped 1,583 points (6.1%) at the week’s Friday morning low (24,218) – before closing the session at 24,538 (down 3.0% for the week). The VIX traded as low as 15.29 Tuesday. It then closed Wednesday at 19.85, jumped as high […]
