Markets are pricing an imminent and sharp drop for interest rates. It's not just about the Fed and rate cuts. But with regard to those, history shows the so-called reaction function flips decidedly when these things happen. Eurodollar University's Money & Macro Analysis Federal Open Market Committee Conference Call June 5, 1989 https://www.federalreserve.gov/monetarypolicy/files/FOMC19890605confcall.pdf Meeting of the Federal Open Market Committee July 5-6, 1989 https://www.federalreserve.go...
Apr 10, 2023•20 min•Ep. 439
For all its bluster, the Federal Reserve very nearly paused its rate hikes last month for obvious reasons. Other central banks already have - two this week - which doesn't bode well for anyone. Another key milestone that curves had been predicting begins to comes true. The "pause" window is now wide open. Eurodollar University's Money & Macro Analysis WSJ: Latest Fed Increase Came Down to the Wire. ‘That Was a Rough Weekend.’ https://www.wsj.com/articles/latest-fed-decision-to-raise-rates-ca...
Apr 07, 2023•20 min•Ep. 438
More extreme hedging swept global markets in morning trading, including another serious collateral run. As it did, curves have been distorted to an even more concerning degree than they had been when banks like SVB and Credit Suisse were all over the mainstream. Examining Credit Suisse we can begin to understand why. Eurodollar University's Money & Macro Analysis Credit Suisse’s Fatal Bank Run Points to Gaps in Liquidity Rules https://www.bloomberg.com/news/articles/2023-04-05/credit-suisse-...
Apr 06, 2023•20 min•Ep. 437
The one thing missing so far from the 2008-style scenario - mass layoffs - hinges entirely on whether businesses believe they can hold out for a second half rebound. As the weeks even days go by, this gets less and less likely. Markets can hear and feel the avalanche of jobs cuts just ahead bringing all the nastiness that will come with it. Eurodollar University's Money & Macro Analysis Janet Yellen: Inflation, Uncertainty, and Monetary Policy https://www.bis.org/review/r171012a.pdf Twitter:...
Apr 05, 2023•20 min•Ep. 436
Led by Saudi Arabia, OPEC announced a surprising round of substantial and "voluntary" production cuts to combat sagging (not surging) crude oil prices. In doing so, the group confirmed every negative suspicion (and so much data) surrounding the economy's chances for this year and into next. Eurodollar University's Money & Macro Analysis Twitter: https://twitter.com/JeffSnider_AIP https://www.eurodollar.university https://www.marketsinsiderpro.com https://www.PortfolioShield.net RealClearMark...
Apr 04, 2023•19 min•Ep. 435
China's reopening just might be the last gasp, the final chance to escape the dreaded 2008-style scenario. If it fails, there is nothing left for the world to pin its hopes on. Examining the latest data from China and why it isn't finding any takers. Eurodollar University's Weekly Conversation w/Steve Van Metre Twitter: https://twitter.com/JeffSnider_AIP https://www.eurodollar.university https://www.marketsinsiderpro.com https://www.PortfolioShield.net RealClearMarkets Essays: https://bit.ly/38t...
Apr 03, 2023•21 min•Ep. 434
Watch Jeff get really fired up over the Federal Reserve Vice Chair Michael Barr's refusal to answer questions about the "central bank's" tools even as he sought more authority from the government to presumably create new ones. The full autopsy on SVB hasn't even been done yet and the utter nerve of these bureaucrats to blame lack of authority for the failure and by implication any fallout. Eurodollar University's Money & Macro Analysis Vice Chair for Supervision Michael S. Barr; Before the U...
Apr 02, 2023•19 min•Ep. 433
The 2008-style scenario requires two parts - bad money and bad economy. We can now more easily see the first of those even if many will refuse to admit it. How about the other? That one isn't hard to identify either, plenty of existing data to choose from. Eurodollar University's Money & Macro Analysis Twitter: https://twitter.com/JeffSnider_AIP https://www.eurodollar.university https://www.marketsinsiderpro.com https://www.PortfolioShield.net RealClearMarkets Essays: https://bit.ly/38tL5a7 ...
Mar 31, 2023•20 min•Ep. 432
Maybe Governor Bailey was a little too honest when trying to downplay the current situation, confessing to "very heightened tensions." But what are these tensions and why have they heightened? The answers can be found deep in the bowels of big bank footnotes as well as in specific market prices. Eurodollar University's Money & Macro Analysis Bank of England on heightened alert for further banking turmoil https://www.bbc.com/news/business-65099136 Liberty Street Economics: Intraday Timing of ...
Mar 30, 2023•22 min•Ep. 431
Officials, regulators, politicians will all claim you and I are the problem. They'll begin to tell us bank panics happen because of misinformation and overly emotional depositors. Examples from the recent and distant past inform us about what's already beginning to take place now: finding a way to make it seem what's going on right now really isn't anything to worry about. Eurodollar University's Money & Macro Analysis Robert Owen: The Federal Reserve Act, Its Origins and Principles https://...
Mar 29, 2023•21 min•Ep. 430
European banks find themselves back in the crosshairs of global monetary deflation, on both the receiving end and the giving end. Deutsche Bank's balance sheet offers a few clues as does the ECB's BLS going along with market shifts. Eurodollar University's Money & Macro Analysis Deutsche Bank Annual Report 2022 https://investor-relations.db.com/files/documents/annual-reports/2023/Annual-Report-2022.pdf ECB Q4 2022 Bank Lending Survey https://www.ecb.europa.eu/stats/ecb_surveys/bank_lending_s...
Mar 28, 2023•21 min•Ep. 429
Jeff and Steve speculate on why Treasury Secretary Janet Yellen called an unscheduled meeting of the Financial Stability Oversight Committee Friday. Was it to congratulate its members for stability achieved? To begin searching for a goat to scape? Figuring out which of the clowns will be stuffed into the car for the clown show? Eurodollar University's Weekly Conversation w/Steve Van Metre Twitter: https://twitter.com/JeffSnider_AIP https://www.eurodollar.university https://www.marketsinsiderpro....
Mar 27, 2023•20 min•Ep. 428
More huge moves in markets as the Fed releases yet more crisis-level data. Treasury bill auctions continue to pile on huge demand, surging prices and plummeting even zero yields. Repo fails jumped and foreign governments "used" an historic amount of their UST securities they had in custody with FRBNY. All of it once again showing this crisis is global and still in its earliest stage. Eurodollar University's Money & Macro Analysis Twitter: https://twitter.com/JeffSnider_AIP https://www.eurodo...
Mar 26, 2023•22 min•Ep. 427
Jay Powell's press conference yesterday acknowledged both parts of the 2008-style scenario present right now. But like his 2008 predecessors, he is once again falling into the same trap thinking this will save us and him from sharing the same fate(s). Eurodollar University's Money & Macro Analysis Transcript of Chair Powell’s Press Conference Opening Statement March 22, 2023 https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20230322.pdf Meeting of the Federal Open Market Committee...
Mar 24, 2023•21 min•Ep. 426
The Fed hiked rates, no surprise, even raised consumer price forecasts and the infamous dot plots. Markets, no surprise, did not buy it one bit. there continues to be way too much which reminds us of 2008, including the confused FOMC stance. Eurodollar University's Money & Macro Analysis FOMC SEP Projections; June 24-25, 2008 https://www.federalreserve.gov/monetarypolicy/files/FOMC20080625SEPcompilation.pdf Twitter: https://twitter.com/JeffSnider_AIP https://www.eurodollar.university https:/...
Mar 23, 2023•20 min•Ep. 425
Yet another funding crisis indication comes to us in a report from Bloomberg. FHLB co-ops are issuing debt like we've never seen before in what can only mean major bank funding problems. The only time we ever see anything like this is crisis. And this one could even be worse than those before. Eurodollar University's Money & Macro Analysis FHLB Financial Statements https://www.fhlb-of.com/ofweb_userWeb/pageBuilder/fhlbank-financial-data-36 Bberg: Key Lender to Regional Banks Raises $88.7 Bil...
Mar 22, 2023•20 min•Ep. 424
Another Sunday action by the Fed, this time less about regional US banks instead acknowledging major global (euro)dollar potential dysfunction. Some maybe a lot of that is coming from Switzerland. What the Fed and other central banks are up to and how Credit Suisse fits into the deflationary/inelasticity puzzle. Eurodollar University's Money & Macro Analysis Credit Suisse Financial Reports https://www.credit-suisse.com/about-us/en/reports-research/quarterly-interim-reports.html Federal Reser...
Mar 21, 2023•21 min•Ep. 423
The deflationary outburst shook up the world and it is still spreading. Financial aftershocks are still being felt but the economic fallout hasn't even begun. Just how early on in the process are we and what happens from here? Eurodollar University's Money & Macro Talk w/Steve Van Metre Twitter: https://twitter.com/JeffSnider_AIP https://www.eurodollar.university https://www.marketsinsiderpro.com https://www.PortfolioShield.net RealClearMarkets Essays: https://bit.ly/38tL5a7 THE EPISODES You...
Mar 20, 2023•22 min•Ep. 422
Why would anyone want to buy a T-bill from the government which didn't return anything? A zero interest loan to the feds makes no sense when you can get far better at least from the Fed. Unless you consider collateral scarcity. In the context of everything going on - including emergency borrowing at 2008 levels - this continued scramble for collateral is simply consistent with how this isn't about SVB, Signature, or even First Republic. Eurodollar University's Money & Macro Analysis Quantita...
Mar 19, 2023•22 min•Ep. 421
The ECB hiked its interest rate benchmarks today by 50 bps. Markets everywhere basically ignored it. What happened over the past week has already left serious and lasting doubts if not persistent scars. What's priced to come next isn't more rate hikes...from anyone. Eurodollar University's Money & Macro Analysis ECB Monetary policy decisions https://www.ecb.europa.eu/press/pr/date/2023/html/ecb.mp230316~aad5249f30.en.html Ben Bernanke; Inaugurating A New Blog https://www.brookings.edu/blog/b...
Mar 17, 2023•21 min•Ep. 420
The curve shape we've been waiting for - and dreading - has finally shown up. This "bad steepening" indicates a 2008-style scenario is unfolding right now. Not a 2008 repeat, but the same general (and generally awful) combination of deflationary money and weak economy. Eurodollar University's Money & Macro Analysis Twitter: https://twitter.com/JeffSnider_AIP https://www.eurodollar.university https://www.marketsinsiderpro.com https://www.PortfolioShield.net RealClearMarkets Essays: https://bi...
Mar 16, 2023•23 min•Ep. 419
We need to review the lessons of Bear Stearns and not just because it is the 15th anniversary of that firm's final day as an independent. The parallels go way beyond a single bank failure like Silicon Valley Bank. Comparing the recent meltdown in curves to what happened back then in the context of those Bear lessons is instructive and unnerving. Eurodollar University's Money & Macro Analysis FOMC Transcript March 10, 2008 https://www.federalreserve.gov/monetarypolicy/files/FOMC20080310confca...
Mar 15, 2023•22 min•Ep. 418
Friday's bond/rates markets moves were almost indescribable. Somehow today's were even bigger. What is going on isn't just about SVB, though looking into SVB can help provide us with some clues. Either way, markets continued to hedge for the worst even after Fed, FDIC, and everything over the weekend which was supposed to calm everything down. Eurodollar University's Money & Macro Analysis SVB March 8, 2023, SEC Form 8-K https://d18rn0p25nwr6d.cloudfront.net/CIK-0000719739/eede72d3-1cc6-45ee...
Mar 14, 2023•21 min•Ep. 417
The real markets (not stocks) have been warning about ugliness for months. Now even the public can see it though policymakers and authorities will continue to deny it. Will there be more? Is the whole thing over? What markets are saying about it. Eurodollar University's Weekly Conversation w/Steve Van Metre Twitter: https://twitter.com/JeffSnider_AIP https://www.eurodollar.university https://www.marketsinsiderpro.com https://www.PortfolioShield.net RealClearMarkets Essays: https://bit.ly/38tL5a7...
Mar 13, 2023•19 min•Ep. 416
The payroll report was supposed to be today's sole topic. Instead, it was completely overshadowed first by a global bond buying panic sparked in Asia then carrying over throughout the US trading day. Failure of Silicon Valley Bank isn't the only problem, rather a symptom of the very deflationary money curves have been warning about. Eurodollar University's Money & Macro Analysis Recession Is the Most Obvious Answer To All the Inversion https://www.realclearmarkets.com/articles/2022/12/02/rec...
Mar 11, 2023•22 min•Ep. 415
If "inflation" has been such a killer, nowhere more so than for food, why wouldn't falling food prices be a welcome development? The answer is actually pretty easy to put together in a whole bunch of strong, persisting correlations which are warning you to be very careful. Eurodollar University's Money & Macro Analysis Twitter: https://twitter.com/JeffSnider_AIP https://www.eurodollar.university https://www.marketsinsiderpro.com https://www.PortfolioShield.net RealClearMarkets Essays: https:...
Mar 10, 2023•19 min•Ep. 414
All that financial volatility last September and October may have been the point of no return. Immediately after, curves swung from alarming to crazy. Now we see the consequences spreading throughout the real economy, hitting Asia and China reopening hype the hardest. Eurodollar University's Money & Macro Analysis Semiannual Monetary Policy Report to the Congress https://www.federalreserve.gov/newsevents/testimony/powell20230307a.htm Statement by Philip Lowe, Governor: Monetary Policy Decisi...
Mar 09, 2023•20 min•Ep. 413
As the Great Inflation wore on into its second decade, even politicians in Congress knew it had something to do with failure at the Fed. Demanding answers, a series of reform laws were passed including the one which commands Jay Powell's presence today. Why all this happened is as important and relevant to today as anytime in between. Eurodollar University's Money & Macro Analysis FOMC Meeting October 1978 https://www.federalreserve.gov/monetarypolicy/files/FOMC19781017meeting.pdf FOMC Meeti...
Mar 08, 2023•22 min•Ep. 412
China reopening hype has been driven mostly by the mainstream media in the West. Recent developments pushed it to another level even though the entire time it was as hollow as every other global recovery scenario the past decade-plus. The Chinese government just exposed the truth - how's that for upside-down! Eurodollar University's Money & Macro Analysis Interpreting China’s unambitious growth target https://www.economist.com/china/2023/03/05/interpreting-chinas-unambitious-growth-target Ch...
Mar 07, 2023•21 min•Ep. 411
More reliable than the unemployment rate. Greater accuracy compared to payrolls. Forget Janet Yellen's bluster and misinterpreting all those Chinese PMIs. There's a much simpler, more fun way to judge then deal with macroeconomic risks. Eurodollar University's Weekly Conversation w/Steve Van Metre Twitter: https://twitter.com/JeffSnider_AIP https://www.eurodollar.university https://www.marketsinsiderpro.com https://www.PortfolioShield.net RealClearMarkets Essays: https://bit.ly/38tL5a7 THE EPISO...
Mar 06, 2023•20 min•Ep. 410
