Category Archives: Credit

Rent Control Issues Hit 7-year Bond Auction

At least, that is our view. We have worried out loud how global interest rate repression may cause ugly bond auctions. A problem that similarly arises in the rent-controlled housing market. …we are watching the Treasury auctions closely and suspect … Continue reading

Posted in Bonds, China, Credit, Uncategorized | Tagged , | 7 Comments

Emerging Market Sub-Zero Corporates

Stunning.  Kind of gums up the valuation models, no? What have the CenBanks wrought? The amount of negative-yielding corporate bonds almost tripled to $109 billion from a week ago Sovereign bonds with sub-zero rates climbed about 50% to $136 billion … Continue reading

Posted in Capital Flows, Credit, Uncategorized | Tagged | 1 Comment

Feels Like 1997

Just back home after a week-long road trip to many major U.S. cities. The “Cranes Of Dubai”  As an economist, I am always looking for anecdotal evidence of how the local economy is doing.  What impressed me most was the … Continue reading

Posted in Credit, Monetary Policy, Uncategorized | Tagged , | 17 Comments

Major Holders Of The U.S. Corporate Bond Market

Summary Bullets The size of the U.S. corporate bond market, as measured by the Fed’s Flow of Funds, totals $13.1 trillion at the end of Q1 2018 It includes $10.2 trillion of domestic issues and $2.8 trillion of foreign issues … Continue reading

Posted in Bonds, Credit, Uncategorized | Tagged , | 2 Comments

Prepare For Much Higher Long-Term Rates

There has been a huge drain of liquidity from the U.S. Treasury market over the past few years, and may signal a structural change to how the United States finances budget deficits. The government will always find a way to … Continue reading

Posted in Bonds, Charts, China, Credit, Geopolitical, Interest Rates, Sovereign Debt, Uncategorized | Tagged , , , | 36 Comments

COTD: Corporate Debt

No lack of supply/issuance in the corporate debt market.   No shortage of demand either. Lots of nuances in interpreting data, however.  First, much of debt going to financial engineering, i.e., stock buybacks.  Some of the supply is borrowing against capital … Continue reading

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COTD: Venezuela Oil Production (t/bpd)

Ergo (among other things), this: There is some minimum threshold level of reserves most central banks will not cross and will resort to various policies to protect and ration foreign exchange reserves, including devaluation, import restrictions, capital controls, selective default, … Continue reading

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The Lehman legacy: Lessons learned? – Economist

Five years on from the collapse of Lehman Brothers and the advent of the global debt crisis, our correspondents assess whether the world economy is sufficiently protected from future shocks.   – The Economist (click here if video is not observable)

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Capitano Crunch: Europe’s Collapsing Monetary Aggregates

Here are some great pictures from Credit Suisse illustrating what’s happening in the European monetary sector.  The monetary aggregates have been collapsing at a greater pace than 2008/09  as banks have been cutting credit and shrinking their balance sheets to … Continue reading

Posted in Black Swan Watch, Credit, Euro, Monetary Policy, Policy, Sovereign Risk, State and Local Government | Tagged , , , | 4 Comments

China’s Deflating and ‘Eerily Similar’ Housing Bubble

Wow!  Check out this. In January we compared the U.S. and China stimulus, In the U.S., the central bank printed and created money through the expansion of its balance sheet.  In China, the government pressured the  banks to create money … Continue reading

Posted in Black Swan Watch, China, Commodities, Credit, Sovereign Debt, Sovereign Risk | Tagged | 2 Comments