The current market structure, though robust on the surface, maybe one of the most fragile in history. On one side, you have investors, both retail and professional, who tend to #FOMO into anything that rises (although professional investors call that the “momentum” strategy). On the other side, you have algorithms…
Category:FED
WHICH BANKS ARE AT RISK OF GOING BUST IN A LIQUIDITY CRISIS? – EPISODE 2
In September 2023, I addressed for the first time the (nasty) topic of #banks’ balance sheet health in the “This time is not different” post on X. After that, I expanded the analysis to large US and European banks in “WHICH BANKS ARE AT RISK OF GOING BUST IN A…
HOW LOW WILL THE EUR SINK THIS TIME?
Last week, the European Central Bank (#ECB) didn’t make a policy mistake. As we discussed in “AFTER JAPAN, NOW IT’S EUROPE’S TURN TO SACRIFICE ITSELF TO KEEP THE US MARKET BUBBLE ALIVE UNTIL THE ELECTIONS”, they simply acted to serve the US Federal Reserve (#FED) interests. The market now expects…
AFTER JAPAN, NOW IT’S EUROPE’S TURN TO SACRIFICE ITSELF TO KEEP THE US MARKET BUBBLE ALIVE UNTIL THE ELECTIONS
At the European Central Bank (#ECB), they are so adamant about cutting rates lately that they are barely sparing a single day to remind markets about it (The time is ripe to cut interest rates next week, European Central Bank’s Rehn says). But, why such a rush when, even according…
WHAT HAPPENS IF JEROME “BURNS” POWELL SUDDENLY RESIGNS?
As you know, there is hardly a day when I don’t fire some shots towards #FED Jerome Burns. However, it is becoming evident that his powers and degree of discretion are equivalent to those of a cloth puppet. I wonder whether Jerome ever imagined being in his current position 10…
BECAUSE FOREIGN INVESTORS CANNOT KEEP PACE WITH THE US BALLOONING DEBT, WHY, WITHOUT #FED QE, JANET YELLEN ONLY ALTERNATIVE IS TO FORCE US PEOPLE TO BUY US TREASURIES.
Yesterday, the news that #China PBOC sold its largest amount of US Treasury reserves ever was not a shock. It was expected to happen sooner or later considering the state of the relationship between the two countries lately. Nevertheless, it was big news. At this point, I started to dig…
U.S. INVESTORS ARE THE DANCING PALLBEARES (AND THE AMERICAN DREAM IS THE ONE IN THE COFFIN)
The past 24 hours have been an absolute display of ridicule that the human mind could not contemplate a few years ago, but the Quantitative Easing fairy dust apparently makes every dream come true. I believe this CNBC article is the best example of incoherence between markets and reality: “CPI…
WHY UNDERSTANDING CENTRAL BANKS’ ACCOUNTING IS IMPORTANT TO UNDERSTAND THE CONSEQUENCES OF THEIR ACTIONS (ESPECIALLY THE BOJ ONES)
Yesterday, I got this interesting question that I believe the answer is worth sharing with everyone: why does the #BOJ balance sheet decrease when the #BOJ intervenes in the FX? And why doesn’t that mean there is less liquidity in the global system? Understanding central banking accounting is the key…
THIS LAST BURST OF QUANTITATIVE EASING WILL ACCELERATE THE OVERALL MONETARY IMPLOSION ALREADY UNFOLDING
Yes, quantitative easing is what just happened under everyone’s nose. The #JPY interventions of this past week effectively injected about 100 billion #USD into the global financial system that previously was not circulating. Why? Because #Japan MOF selling reserves to fetch #USD that can then be sold in the market…
WHY ILLEGAL IMMIGRATION IS VERY INFLATIONARY AND IF THE FED DOES NOT HIKE RATES NOW INFLATION WILL BE HOT RIGHT BEFORE THE US ELECTIONS IN NOVEMBER
Despite the #BOJ panic intervention as soon as the #JPY broke 160 against the #USD, and a US Treasury QRA (Quarterly Refinancing Announcement) that has been disclosed for an amount higher than expected, the longer end part of the US government bonds yield curve did not bother to move that…