BOJ Governor Kuroda hit the wires last night by hinting the BoJ may begin maybe possibly thinking about the potential to maybe begin reducing (tapering) its mammoth QE program in 2019. Mammoth is too gentle a term for the BoJ’s QE program. Epic works better. With newly printed QE-yen, the BoJ has been buying every newly issued JGB (Japan federal government bond), and with […] Read the rest of this entry
Barron’s has a great interview with Sheila Bair today. Ms. Bair was Chair of the CFTC then the FDIC. Few people understand the U.S. banking system and its risks better than her. https://www.barrons.com/articles/sheila-bair-sees-the-seeds-of-another-financial-crisis-1519916556 Here are some take aways: – “I don’t have a problem with deregulation but I can’t believe we are moving to weaken capital rules for banks.” – “In these benign […] Read the rest of this entry
The new Fed Chairman Powell gave Congressional testimony this week about the economy, inflation, and interest rates. In summary (to paraphrase): the economy is doing well and going to continue to do so inflation is on track to reaching our 2% target unless something bad happens, we’ll likely raise interest rates 25bps four times this year. NY Fed Prez Bill Dudley chimed in a […] Read the rest of this entry
Some interesting things…. The stock market downdraft from earlier this month caused the biggest quant fund blow up in history. And yet we were going to see another 3-day bloodbath last Thursday through today –but it was prevented by James Bullard’s comments early last Thursday morning. So far this year we’ve seen record setting advisor sentiment readings. We’ll revisit that this month and next. […] Read the rest of this entry
Yesterday morning I watched the NY Federal Reserve live presentation about a dire economic situation in Puerto Rico and the U.S.V.I. that is a result of hurricane Maria. In the Q&A session someone asked about cryptocurrencies. Bill Dudley (NY Fed Prez & CEO) laughed and said cryptocurrencies were a terrible form of currency in that they fail to deliver a stable store of value. […] Read the rest of this entry
Before this week’s plummet, last week saw the largest 1-week drop in mini Greedometer values ever (20 years of data). The drop was twice as large as the next largest drop. All that out of a mere 3.8% drop over the course of a week. Hmmmm….
Some fun facts about the U.S. stock market over the past while…. But first this: The Greedometer (slow moving risk gauge) reached an all-time high last week. The mini Greedometer (medium speed risk gauge) reached all-time high 2 weeks ago (the week the SPX peaked). As you know, stock market price is NOT an input parameter to these algos. There was an all-time […] Read the rest of this entry
For months now Mr. Kashkari (Minneapolis Fed Prez) has been diligently attempting to bring everyone’s attention to the fact the capital structure /creditor rules for big banks are a fallacy. When big banks see their balance sheets under duress and a bank flirts with solvency, you cannot apply standard re-structuring/ re-capitalization because it would involve applying a haircut (loss) to bond holders. That was […] Read the rest of this entry