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Release the Dudley. Again

NY Fed Prez Bill Dudley was interviewed by the A.P. today. The interview hit the tape around 3pm. It moved asset prices, but not a lot. Arguably the most important take away from his interview was that the Fed’s balance sheet is going to be reduced but it would be incredibly slow.  Dudley estimated that 5 years from now the Fed’s balance sheet would […] Read the rest of this entry »

Calling Yellen…Dudley…Bullard. Time to threaten to spike the punch bowl. Again.

Immediately prior to Bill Dudley threatening to “not take the punch bowl away yet” in March, the mini Greedometer looked like it does now (dropping near 60). That must have been too problematic, so Dudley made no less than three threats over the ensuing two weeks. Happiness was rented for about six weeks. This brings us to May. The mini Greedometer was looking the […] Read the rest of this entry »

Guitar as a service

Yesterday my wife sent me an email with a link to an interesting article about the guitar industry (because I own a guitar, appreciate their beauty, took a year of lessons, and wish I could play 1/10th as well as my son).  In summary, the article suggests the reason the guitar industry has been in decline is because there are no ‘guitar heroes’ like […] Read the rest of this entry »

Financialization: banks gobbling up the U.S. economy and making it riskier.

This is a chart showing the asset base of U.S. commercial banks and real GDP from 1972 to Q1 this year. Looks a little troublesome no? Let me make it easier for you. This graph is the quotient of the blue line in the chart above (bank assets) divided by the red line above (real GDP). Worried yet? You should be. This graph clearly […] Read the rest of this entry »

‘Big Short’ Steve Eisman says financial system is safe

This morning’s FT has a good article about Steve Eisman’s view on the global financial system. Eisman -who made a $B shorting the U.S. real estate sector in 2007-2009- was portrayed by Steve Carell as the main character in the movie “The Big Short”. Here’s where I agree: The financial system is “safer than it has been in decades”. Well, I don’t know about decades, but […] Read the rest of this entry »

NYSE Margin Debt: nothing to see here…

NYSE margin debt for May was posted. Adjusted for M1 money supply, it fell from approx $551B to approx $528B. I’m expecting a new all-time high to be reached this month at $555B. Nothing to see here….

SPX: odd one out…still…

An update….   SPX: Long Bond: USD/JPY:   USD/CNH:   Something’s gotta give….    

Bullard: not my job to burst bubbles

Jim Bullard (St Louis Fed Prez and one of the biggest policy doves/bubble blowers  around) gave a speech this morning. The upshot: It’s not my job to burst bubbles. Tech is to blame for the SPX bubble. Wait for things to look better before any more rate hikes. full chart deck here: link  

Shortage of German Bunds not a problem (despite FT view)

There’s an interesting article in the FT this morning (link here if you have an FT subscription).  It suggests that because the ECB has for two months in a row not been able to buy its German Bund quota (per its own QE program), the QE program will have to be tapered.  Let me suggest the FT is wrong in their view. The ECB […] Read the rest of this entry »

One of these things is not like the other (SPX, 30yr, USD/JPY, USD/CNH)

One of these things is not like the other…. Guess which one has the B0J and SNB openly buying it. To be fair, there may well be some  support from the plunge protection team here in the U.S. (info here), the “national team” in China (PBoC), and the ECB. Absent the Dudley bombs from 8 weeks ago (“will not take the punch bowl away”) […] Read the rest of this entry »