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Two weeks ago, well before most banks slashed their GDP forecasts (most notably Goldman who took a machete to its Q3 GDP estimate of 8.5% and now sees just 5.5% growth in Q3), we noted that "a sudden negative change" had taken place in the economy, predicting (correctly) that retail sales would be a big miss (they were).
Bubbles are self-reinforcing, yet inevitably unsustainable inflation. There are different types of Bubbles – Credit and speculative asset Bubbles being the most common. Inflationary processes are fed by some extraordinary monetary phenomena, with protracted Bubbles invariably enjoying systematic governmental support (i.e. loose central bank policies, government incentives and backstops, stimulus measures, etc.).
Aug 23, 2021 - 11:38:07 PDT
The REPO market, where banks are buying short-term treasuries on an epic scale, on face value this can be explained that the banks are reluctant to lend and so Banks awash with cash are parking their excess deposits with the central banks so that they do not have to increase their capital reserves to cover the excess deposits as the following graph illustrates...
If Democrats say they’re not going to tax a class of people or entities, bet the farm they will. From John Kartch at atr.org: [To book an interview on this topic please contact John Kartch at…
Since the beginning of this year, price inflation has increased much, and it could continue onward to exceed the 1970s-era price spikes. Understandably, Republicans are trying to blame President Joe Biden for the price increases.
Anecdotes tell us what the data can’t: Vaccinated people appear to be getting the coronavirus at a surprisingly high rate. But exactly how often isn’t clear, nor is it certain how likely they are to spread the virus to others. Though it is evident vaccination still provides powerful protection against the virus, there’s growing concern that vaccinated people may...
Aug 23, 2021 - 11:06:42 PDT
Federal Reserve Chairman Jerome Powell and Fed Vice Chairman for Supervision, Randal Quarles, would desperately like to make three of the Fed’s emergency bailout programs to Wall Street disappear from further scrutiny by Congress or the American people. That’s because the specific details of those programs do not comport with the testimony that...
Crescat invites you to take a look through our current macro deck. This research is an important component of our investment process, illustrating how we evaluate the broader market and positions within our five strategies.
Let's review recent unemployment claims to see what the trends suggest.
For a glimpse at how fast demand for commodities has rebounded in the wake of the coronavirus, look no further than the market for shipping them. Monday marked the 10th consecutive increase for the Baltic Dry Index, a benchmark measure of commodity hauling costs that has surged to an 11-year high. “Earlier in the year, people thought this was a...
Outnumbered and with their party's most powerful leaders arrayed against them, nine moderate Democrats trying to upend plans for enacting President Joe Biden's multitrillion-dollar domestic program face a House showdown .
While the stock market continues to rise to new all-time highs, the options markets are betting on a massive crash. If you’re unfamiliar with options, they are securities that give you the right, (but not the requirement) to buy shares …
Most Money-Market Instruments Slide Below Fed's Reverse Repo Floor As Collateral Shortage Gets WorseAug 23, 2021 - 10:34:12 PDT
With usage on the Fed's reverse repo hitting daily records as US Treasury supply shrinks as a result of a big drop in Bill sales, supply-demand imbalances continue to weigh on the U.S. dollar funding space as money-market rates, from Treasury bills to repurchase agreements, trade below the new yield on the Federal Reserve’s reverse repo facility.
This is the largest student loan forgiveness measure put in place since Biden took office, the Education Department said in a press release. In total, the Biden administration has forgiven about $8.7 billion worth of student loan debt for roughly 455,000 borrowers.
Aug 23, 2021 - 09:16:57 PDT
Central bankers from around the world will convene this week in Jackson Hole, Wyoming to discuss monetary policy as the global economy enters the 21st month of the coronavirus pandemic.
In this 08-13-21 issue of "Bulls Charge Ahead," the market posted marginal new highs this week as investors await action from the Fed. Is risk gone?
Question: Suppose the Fed doubles the supply of ”high-powered money” (monetary base) from around 15 percent to 30 percent of US GDP over a period of less than two years, then announces that the pace of increase will slow to just above zero within the next year providing that the economy remains “on...
A think tank highly critical of Federal Reserve Chair Jerome Powell's record on banking regulation released an assessment of his four-year tenure on Monday that is by turns scathing and complementary, highlighting the competing considerations as U.S. President Joe Biden weighs whether to reappoint him. The 23,000-word report from Better Markets, released...
Federal Reserve chairs have frequently used the central bank’s annual Jackson Hole symposium at the base of the magnificent Teton mountain range in Wyoming to make major policy pronouncements. Last year was no exception — even though the conference was held virtually because of Covid-19. After years in which the Fed fell short of hitting its 2% inflation...
Call it the Pretty Big Short. Michael Burry, whose huge, wildly profitable bets against the housing bubble were made famous in “The Big Short,” is wagering that long-term U.S. Treasuries will fall.His Scion Asset Management held $280 million of puts on the iShares 20+ Year Treasury Bond ETF at the end of June, according to a regulatory filing released this week.