Chinese authorities held a surprise press conference early this morning where PBOC Governor Pan Gongsheng did his best Oprah Winfrey impression handing out rate cuts to practically everyone. All that does is further expose the gravity of the situation: the more the central bank or any authority does, the worse you know it is since rate cuts never work. China just announced a lot of them. Eurodollar University's Money & Macro Analysis Bloomberg China Unleashes Stimulus Package to Revive Econo...
Sep 25, 2024•19 min•Ep. 891
More confirmation that recession is coming back with a vengeance in Europe. The latest data indicates the dangers this time around including jobs and layoffs. This situation in Europe is hardly unique. This is why central bankers are out in force downplaying their own rate cuts; to the point a few policymakers are outright lying why they voted for them. Eurodollar University's Money & Macro Analysis Bloomberg Fed’s Waller Says Slowing Inflation Led Him to Support Large Rate Cut https://www.b...
Sep 24, 2024•18 min•Ep. 890
The Fed just cut its benchmark rate by 50-bps even though jobless claims are among the lowest in their history. At the same time, CPI shelter prices have accelerated. Neither seems like it would warrant the Fed action yet there are good reasons to believe true unemployment is very different from claims and current market rents are plunging. Eurodollar University's conversation w/Steve Van Metre https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU
Sep 23, 2024•19 min•Ep. 889
FedEx's CEO admitted some truth about the Fed's rate cut this week, and the stock was immediately punished for it, dropping 15% on Friday. This raises a bunch of questions, starting with: what happens to stocks in general when the Fed cuts rates? The answer is not what you think. Eurodollar University's Money & Macro Analysis CNBC FedEx quarterly profit disappoints as demand for speedy delivery wanes https://www.cnbc.com/2024/09/19/fedex-reports-drop-in-quarterly-earnings-on-lower-demand-for...
Sep 22, 2024•19 min•Ep. 888
Now that the Fed has done it, everyone wants to get in on the act. They call it "undershooting" which is just a fancy word for "bonds were right." Switzerland, Canada, even the Europeans all thinking hefty and accelerated schedules. Leave it to the Brits to be the lone exception. Eurodollar University's Money & Macro Analysis Bloomberg Bank of Canada Officials Split on Balance of Inflation Risks https://www.bloomberg.com/news/articles/2024-09-18/bank-of-canada-officials-are-split-on-balance-...
Sep 20, 2024•18 min•Ep. 887
The Fed cut its benchmark rates by 50 bps in a panicky move to catch up to both the economy and the marketplace. Reaction in the latter was muted because this wasn't unexpected. All the FOMC did was confirm everything - and then deny that it did. Eurodollar University's Money & Macro Analysis Bloomberg Fed Minutes Show Officials Rally Around Higher-for-Longer Rates https://www.bloomberg.com/news/articles/2024-05-22/minutes-show-officials-rallying-around-higher-for-longer-rates FOMC September...
Sep 19, 2024•20 min•Ep. 886
People imagine a recession is when masses of people are being laid off and so consumer spending isn't just negative, it must be crashing. While those can happen in a downturn, they tend to show up at the end. So, if you're waiting for those to make a determination you'll be way too late. Evidence consistently and conclusively shows hiring not firing creates the recession environment that is marked by a drop in real spending. We have both. Eurodollar University's Money & Macro Analysis Robert...
Sep 18, 2024•17 min•Ep. 885
Americans' hopes and dreams of better opportunities have utterly crashed and burned over the past five months. This isn't about more price increases, rather how those in the past have combined with recession prospects to rob the future. The 2020s have taken the worst aspect of the 2010s and added more trouble on top. Eurodollar University's Money & Macro Analysis Larry Summers The Age of Secular Stagnation https://larrysummers.com/2016/02/17/the-age-of-secular-stagnation/ Larry Summers IMF A...
Sep 17, 2024•20 min•Ep. 884
Consumers can't afford groceries, so how is a lower reverse repo rate going to help them? Now that it is settled the Fed will cut rates next week, everyone wants to know by how much. The real story is what's behind the cuts in the first place and what that means for financial markets as well as the economy. It isn't the murder hornet rate. Eurodollar University's conversation w/Steve Van Metre https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU
Sep 16, 2024•18 min•Ep. 883
Authorities in China continue to do everything they can to derail the country's globally synchronized bond rally. It continues to hit record low yields anyway in spite of increasingly desperate government efforts. But why? More ugly data on banks, incomes, and Chinese jobs shows bonds are right, and not just about what's already happened to this point. Eurodollar University's Money & Macro Analysis China Xinhua Xi Jinping presided over a symposium on comprehensively promoting ecological prot...
Sep 15, 2024•20 min•Ep. 882
The ECB cut rates for the second time, as expected, though amidst a strong bond/bund market rally that has now completely un-inverted that yield curve. This comes at a time when major businesses like Volkswagen are thinking about closing down factories due to how much idle capacity they have. What links all of these together, what explains all the facts, is that there was never a global recovery, only a transitory price illusion. Eurodollar University's Money & Macro Analysis Bloomberg Half-...
Sep 13, 2024•19 min•Ep. 881
It was all banks all day yesterday. Basel rules foul-up. Warren Buffett continuing to dump BofA. Citi dumping on credit. Deutsche unloading CRE, or trying to. JP Morgan downgrading...itself. Most of all Ally Financial admitting unemployment is fast becoming a big problem and right on its balance sheet. Eurodollar University's Money & Macro Analysis Bloomberg JPMorgan Leads Banks in Dimming Outlooks, Spoiling Win on Rules https://www.bloomberg.com/news/articles/2024-09-10/jpmorgan-leads-banks...
Sep 12, 2024•19 min•Ep. 880
There's no September here as interest rates continue to plunge. The two-year UST is at a record low relative to the Fed. In the past when the two-year has dropped like this it has meant nothing good. Combined with the still ongoing crash in energy prices, we have a solid sense of what's coming next. And it isn't just a lot of rate cuts. Eurodollar University's Money & Macro Analysis CHECK OUT EURODOLLAR UNIVERSITY'S DDA SUBSCRIPTION GO MUCH DEEPER AND STEP INTO THE BLACKHOLE OF MONEY AND MAC...
Sep 11, 2024•20 min•Ep. 879
Interest rates continue to collapse in China even outpacing US Treasuries. Commodities are being crushed as prospects for the world's two largest economies are getting worse by the week; by the day. Over the weekend, the Chinese reported negatives in consumer and more so producer prices, adding more evidence to what is shaping up in bond markets and beyond as a looming deflation shock. Eurodollar University's Money & Macro Analysis Bloomberg China’s Deflationary Spiral Is Now Entering Danger...
Sep 10, 2024•19 min•Ep. 878
We know there are Fed rate cuts coming in September and that there is very good chance it will be 50 bps. Could policymakers also surprise by ending QT (not that it matters)? Might that be a first step toward the next QE? It's not as far-fetched as you may think; after all, some at the Fed were talking rate hikes just two months ago. Eurodollar University's conversation w/Steve Van Metre Bloomberg Fed’s Waller Says Jobs Data ‘Requires Action,’ Open to Big Cut https://www.bloomberg.com/news/artic...
Sep 09, 2024•19 min•Ep. 877
More meltdowns across key markets, starting with the Treasury curve rapidly unwinding. Commodities are getting crushed, gasoline absolutely smoked. Swaps. Yen. The August payroll report only further confirmed the reasons why all this is happening. Eurodollar University's Money & Macro Analysis Bloomberg OPEC+ Pauses Oil Supply Hike in Effort to Reverse Price Slump https://www.bloomberg.com/news/articles/2024-09-05/opec-has-deal-to-pause-planned-oil-hike-for-2-months-delegate https://www.euro...
Sep 08, 2024•19 min•Ep. 876
Politicians always feel the need to do something even if they don't know why or what's actually wrong. That's all "price controls" really are since they sure don't control anything like prices. Unknown to most people, the US has already experimented with them running price and wage restrictions for several years. The results are conclusive. Eurodollar University's Money & Macro Analysis Robert Bleiberg Farewell to Wage and Price Controls https://imprimis.hillsdale.edu/farewell-to-wage-and-pr...
Sep 06, 2024•19 min•Ep. 875
Carry trade is back! In reality, it never left. Not because of BoJ rates hikes or threats, rather all the growing evidence the US isn't at risk of recession, so many indications showing it's here. Oil and gasoline are crashing. Curves unwinding. Forward rates project...a total mess. In time for all of the fun, JOLTS shows job openings plunge and layoffs jump. Eurodollar University's Money & Macro Analysis CNBC Job openings fell more than expected in July in another sign of labor market softe...
Sep 05, 2024•18 min•Ep. 874
While the world was focused on financial volatility and liquidations at the start of August, something odd happened at the Federal Reserve's Discount Window (DW). Given everything else that has gone on since then, starting with the yield curve then considering now-cracking commodities, plus foreigners' dollar buffers and even US dealer banks' collateral holdings, there aren't that many ways to interpret what banks are doing - or not - at the DW. Eurodollar University's Money & Macro Analysis...
Sep 04, 2024•22 min•Ep. 873
Wholesale gasoline prices plunged in August to their lowest since the start of the year. This sounds like a positive, both for consumers as well as Fed policymakers and the disinflationary impact on consumer prices. But refinery margins have crashed to their lowest in three and a half years which instead points to more and bigger trouble. Eurodollar University's Money & Macro Analysis CNBC Oil prices ease on US gasoline demand worries, economic data https://www.cnbc.com/2024/05/29/oil-rises-...
Sep 03, 2024•18 min•Ep. 872
The most significant macro data from the past week certainly wasn't GDP (it wasn't even the most important datapoint within its own series), instead it was personal savings. It is yet another confirmation of what we've been hearing from across the economy and markets. Consumers are tapped out, and they're out of money because of jobs and incomes. Eurodollar University's conversation w/Steve Van Metre BLS Metropolitan Area Employment and Unemployment (Monthly) https://www.bls.gov/web/metro.supp.t...
Sep 02, 2024•19 min•Ep. 871
People keep saying the economy is in the toilet and the US government keeps raising its estimate for GDP. The general public isn't wrong, GDP is. How do we know? Because that's what GDP says - its other side. Not as well known, it should be because this is the one which is far more accurate during cyclical downturns. History, academic studies, consistency with other signals, not to mention how much it backs up popular perception. Everything including the better side of GDP is lined up against GD...
Sep 01, 2024•19 min•Ep. 870
New information from various sources all around the US service sector shows a downturn taking hold in that segment with employment signals turning more and more negative. It confirms the ongoing and more decisive bull steepening continuing to take shape in the Treasury market. Even mainstream sources are having to cover the fact there is something big happening when you can see it in services. Eurodollar University's Money & Macro Analysis CNN A key part of America’s economy has shifted into...
Aug 30, 2024•18 min•Ep. 869
German observers are saying the economy has reached crisis proportions and the reason is what the US economy's weakness is doing to the rest of the world. Rather than recover as many in Europe had hoped, the situation has turned grim due to America's growing negatives. As one result, bulls are firmly in charge of all the curves. Eurodollar University's Money & Macro Analysis IFO Business Climate Index deteriorates (August 2024) https://www.ifo.de/en/facts/2024-08-26/ifo-business-climate-inde...
Aug 29, 2024•19 min•Ep. 868
Chinese e-commerce retailer Temu becomes the latest global consumer business to warn about the economy - exactly what bonds have been doing all year much to the growing frustration of authorities. They'd rather derail lower market rates at the same time as cutting their own? It actually does make a lot of sense as all these things are related. Eurodollar University's Money & Macro Analysis Bloomberg PDD’s Warning Highlights Growing Strain on China Consumer Firms https://www.bloomberg.com/new...
Aug 28, 2024•18 min•Ep. 867
Just as low interest rates are being validated in every way, some Economists like Nouriel Roubini are alleging that yields are instead being held down by noted monetary genius Janet Yellen who has the Treasury Department engaged in a form of stealth QE. The problem is actually Economists who think interest rates are nothing more than tools to be manipulated by all-powerful govts when in reality they are more accurate though not perfect reflections of how govts fail. Eurodollar University's Money...
Aug 27, 2024•19 min•Ep. 866
Jay Powell's Jackson Hole appearance and speech wasn't really about rate cuts. It was a sales job trying to sell you and as much of the world as possible on the Fed itself. Just making the pitch, however, means implicitly admitting the US economy just leapt out of the frying pan and into the fire. Powell says it's OK because he knows how to turn the heat down when there is zero reason to believe anyone at the FOMC knows where it is us or what the temperature is going to be. Eurodollar University...
Aug 26, 2024•19 min•Ep. 865
It wasn't just a pivot, Powell admits the US economy is in trouble as unemployment has already started rising. While that's it's own can of worms, there are also more monetary and financial considerations related to what happened early in August. CLOs, collateral, stock market liquidations, all tied to what the Fed just agreed to. Eurodollar University's Money & Macro Analysis EDU YT Japan is buying MASSIVE Amounts of Junk Credit https://www.youtube.com/watch?v=_a_2J6mU48o CNBC Jay Powell Ja...
Aug 25, 2024•22 min•Ep. 864
The economy really has deteriorated quickly, enough that what seemed highly unlikely if not impossible early in July was very near to happened at the end of the month. I said a July Fed rate cut was in play on the 3rd and now according to the FOMC's minutes...it was. That, along with panicky central bankers seeking to quicken the pace of cutting, is definitely not a good sign. Eurodollar University's Money & Macro Analysis EDU YT This Could Force the Fed to Cut Rates in July https://www.yout...
Aug 23, 2024•21 min•Ep. 863
Was Macy's the latest victim of the strong labor market? That doesn't make sense, of course, and now the government data has been revised massively lower to better align what really happened last year with where we are this year. The new figures show not just one-third fewer jobs gained, more importantly what that does the rate of change in the rate of change (2nd derivative). It ends up in Macy's sales forecast. Eurodollar University's Money & Macro Analysis CNBC Macy’s cuts sales forecast ...
Aug 22, 2024•19 min•Ep. 862
