Both the yield curve's 3-month/10-year spread and the Fed's near term forward spread have nose-dived in April. The former by far at a record extreme (for modern USTs), the latter worst since the early 80s. You have to start from these in order to understand current data, the current situation, as well as what the official story will be about both. Eurodollar University's Money & Macro Analysis Twitter: https://twitter.com/JeffSnider_AIP https://www.eurodollar.university https://www.marketsin...
Apr 28, 2023•18 min•Ep. 455
Bank of England's Chief Economist tells Columbia University podcast that people need to accept that they're poorer and worse off, and to stop trying to do anything about it because they're getting in the way of central bankers attempting to fix a mess they can't seem to fix. While they're afraid of a wage-price spiral there's no evidence they should be afraid of, the costs of the past few years are coming due in a much worse way. Eurodollar University's Money & Macro Analysis Columbia Law Sc...
Apr 27, 2023•18 min•Ep. 454
Major buying the curves has pushed them back down to and even below the worst points since mid-March. Markets have never been more certain about what's coming and why. Since eurodollar futures are no more, we'll have to depend on 3-month SOFR futures from here on. And right here they're beyond pessimistic. Eurodollar University's Money & Macro Analysis Bloomberg: Hedge Funds Place Biggest Ever Short on Benchmark Treasuries https://www.bloomberg.com/news/articles/2023-04-24/hedge-funds-place-...
Apr 26, 2023•18 min•Ep. 453
The transmission from deflationary money to a deflationary economy was always going to come from a credit crunch. Updated data shows the banking system remains in a critical state which means taking proactive steps to freeze their collective activities in broad fashion. So much, even the mainstream media is reporting the gory details. Eurodollar University's Money & Macro Analysis A Corporate Credit Crunch Is Just Getting Started https://www.bloomberg.com/graphics/2023-corporate-credit-crunc...
Apr 25, 2023•20 min•Ep. 452
According to one source, tourism/attendance at Disney's main theme park in Orlando already dropped off a cliff. Hardly a surprise, the primary risk to the global economy - not just US - isn't inflation but the deflationary money the banking crisis revealed to the public spilling over and causing major downside consequences. Slowly, at first. Eurodollar University's Weekly Conversation w/Steve Van Metre Twitter: https://twitter.com/JeffSnider_AIP https://www.eurodollar.university https://www.mark...
Apr 24, 2023•19 min•Ep. 451
Something is going on with bills. There's a debt ceiling deadline looming. Two must be related, says the mainstream, otherwise the former would mean something bad and Jay Powell said nothing bad could happen - more than the other stuff that already did, of course. Eurodollar University's Money & Macro Analysis Quantitative Easing: How Well Does This Tool Work? https://www.stlouisfed.org/publications/regional-economist/third-quarter-2017/quantitative-easing-how-well-does-this-tool-work Twitte...
Apr 23, 2023•20 min•Ep. 450
Four-week bill yield plummeted by around 60 bps at one point in today's trading. Serious monetary pressures are still there, continue to get worse even a month after the mid-March banking crisis and several weeks after officials declared it over with. They want to go back to focusing on inflation that doesn't exist for the deflation which is really starting to rampage. Eurodollar University's Money & Macro Analysis Twitter: https://twitter.com/JeffSnider_AIP https://www.eurodollar.university...
Apr 21, 2023•20 min•Ep. 449
Like Warren Buffett last week, this week Elon Musk issues grave warning about health of global banks. But why? Is it inflation run amok, or the world paying in deflation for the past few years of massive distortions? Eurodollar University's Money & Macro Analysis Elon Musk Interview w/Tucker Carlson https://www.foxnews.com/video/6325259104112 Q1 2023 J B Hunt Transport Services Inc Earnings Call https://finance.yahoo.com/news/q1-2023-j-b-hunt-114817141.html Twitter: https://twitter.com/JeffS...
Apr 20, 2023•18 min•Ep. 448
Brazil's President Lula traveled to Shanghai to finalize bilateral engagement bypassing the US dollar. This is not de-dollarization, rather an acknowledgement the eurodollar system is in a crisis. And that means the dollar goes up, probably way up, wrecking everything along the way. Can't blame Brazil (or China) for trying to dodge it. Eurodollar University's Money & Macro Analysis Bloomberg: Hedge Funds Go All In on Dollar, First Time in Over a Year https://www.bloomberg.com/news/articles/2...
Apr 19, 2023•18 min•Ep. 447
Where are we? Is there still a crisis? Is it over(blown)? The "fear ratio" helps sort out signal from so much noise. Since it sits at the intersection of money, finance, and especially real economy, it's determination shouldn't be taken so lightly. 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 THE EPIS...
Apr 18, 2023•19 min•Ep. 446
The hawks are back at the Fed doing what Fed hawks always do. Beginning with overestimating their own tools, they then overestimate the resilience of the banking system before also overestimating how great the economy is because of the unemployment rate. Never mind they didn't see any of this coming, they assure you there's nothing else coming. Eurodollar University's Money & Macro Analysis Financial Stabilization and Macroeconomic Stabilization: Two Tools for Two Problems Governor Christoph...
Apr 17, 2023•19 min•Ep. 445
This week was a wild one, including how during it legendary investor Warren Buffett said he was selling bank stocks because there were more failures still to come. While depositors won't see any losses, that doesn't mean there won't be any. Nor fallout from it, as the latest data from markets and macro shows. Eurodollar University's Money & Macro Analysis Twitter: https://twitter.com/JeffSnider_AIP https://www.eurodollar.university https://www.marketsinsiderpro.com https://www.PortfolioShiel...
Apr 16, 2023•20 min•Ep. 444
First they said it was a growth scare. They told us to ignore inversions. Then they pointed to the unemployment rate and said there's no way we could have a recession. Now they admit there will be a recession but also how there's a chance for worse. In other words, they're following market curves like we said they would and have finally arrived just one step short of inevitable. Eurodollar University's Money & Macro Analysis Twitter: https://twitter.com/JeffSnider_AIP https://www.eurodollar....
Apr 14, 2023•19 min•Ep. 443
Just as the interest rate swap market had indicated, big collateral scarcity as 4w Tbill rates yesterday plummeted. Also, Japanese bills for more confirmation. Add those to the US CPI results for March and together they more than equal the end of 'inflation'. Eurodollar University's Money & Macro Analysis Austan D. Goolsbee, president and chief executive officer, Federal Reserve Bank of Chicago, on April 11, 2023, at the Economic Club of Chicago Forum Luncheon, in Chicago, IL. https://www.ch...
Apr 13, 2023•19 min•Ep. 442
Alarming compression of interest rate swap spreads indicate more systemic issues in global balance sheet capacities and collateral, too. Also, the IMF reported on its World Economic Outlook where it very plainly reveals just how worried authorities have become. Eurodollar University's Money & Macro Analysis IMF WEO April 2023 https://www.imf.org/-/media/Files/Publications/WEO/2023/April/English/text.ashx FT: IMF warns of ‘hard landing’ for global economy if inflation persists https://www.ft....
Apr 12, 2023•19 min•Ep. 441
The Federal Reserve's H.8 data on US commercial banks shows just how much of a systemic shock the March seasonal bottleneck had produced. Institutions got hit with historic levels of deposit declines, emergency borrowings like nothing before, and because of it massive fallout followed - and continues to follow. Eurodollar University's Money & Macro Analysis Twitter: https://twitter.com/JeffSnider_AIP https://www.eurodollar.university https://www.marketsinsiderpro.com https://www.PortfolioShi...
Apr 11, 2023•19 min•Ep. 440
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
