Category Archives: Monetary Policy

“Bernanke… is fundamentally misguided” – Newt Gingrich

Posted on November 2, 2010 by macromon

We are wondering out loud if a Tea Party/Republican rout with both houses of Congress changing hands could blindside markets with a huge short covering rally in the dollar?  QE2 needs to be large enough to offset the positive dollar … Continue reading →

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Sovereign Debt: Not So Risk-Free

Posted on November 1, 2010 by macromon

Joseph Cotterill over at FT Aphaville has a great post on how some European corporate bonds are trading through their sovereigns.   Not surprising it taking place in countries without access to a printing press to monetize deficit spending, Markit pointed … Continue reading →

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Gold and the QE War?

Posted on October 31, 2010 by macromon

This is going to an interesting week for gold.  We expect some currency fireworks as the Bank of Japan draws a line in the sand for the Yen around the 80 level.  Will the Japanese respond to QE2 with more … Continue reading →

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Chart of the Day – Yield Seekers Go Parabolic

Posted on October 28, 2010 by macromon

“John Bull can stand many things, but he can’t stand two zero percent.” We have written about yield seeking capital flows, the currency wars, and zero interest rate, monetary policy, but nothing illustrates the issue better than this chart of … Continue reading →

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US Budget Deficit 9th Largest Economy in the World

Posted on October 26, 2010 by macromon

After falling to a low of 2.33 percent on October 8th, the 10-day Treasury has sold-off closing today at a yield of 2.64 percent.  The recent high is around 2.83 percent, which we will be watching closely. To get a … Continue reading →

Posted in Bonds, Commodities, Credit, Currency, Equities, Geopolitical, Gold, Monetary Policy, Policy | Tagged , , | 1 Comment

“Emerging markets at risk from a gigantic bubble” – FT

Posted on October 19, 2010 by macromon

In case you missed it,  great FT piece by Peter Tasker of Argus Research about asset bubbles in Japan and China and the role of FX policy.  It’s all about Macro these days, The message is clear. It wasn’t the … Continue reading →

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Fed creating “grave distortions” – Brazil Central Bank

Posted on October 18, 2010 by macromon

Brazil is considering additional measures to keep the Real from appreciating  any further.  We like the Economist’s Big Mac Index, which is based on the concept of purchasing-power parity, to get a sense of the over/undervaluation of a currency.  The … Continue reading →

Posted in Black Swan Watch, Bonds, BRICs, China, Commodities, Currency, Geopolitical, Gold, Monetary Policy, News, Policy, Politics, Sovereign Risk | Tagged , , , , , | Leave a comment

The Greatest Trade Ever?

Posted on October 15, 2010 by macromon

Check out Bespoke’s great table of Credit Default Swap (CDS) prices.   We don’t trade CDS, but doesn’t Long China/Short Japan,  straight up,  seem like the greatest trade ever? Or just outright short at 53 bps?   Japan’s public funding requirement is almost … Continue reading →

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“All that liquidity ends up not where it is supposed to be…”

Posted on October 13, 2010 by macromon

Great CNBC interview (click for video) with British historian, Niall Ferguson.  It’s worth the 5 minutes of your time.  We’re amazed how well Ferguson understands the global economy and articulates the risks better than many trained economists.   Money quotes: “There … Continue reading →

Posted in Black Swan Watch, Bonds, BRICs, China, Commodities, Credit, Currency, Monetary Policy, Policy, Sovereign Risk | Tagged , , , | Leave a comment

Rising Tide (of liquidity) Lifts All Boats

Posted on October 12, 2010 by macromon

Great chart from Active Trader of the S&P5oo correlation with other markets.  Have you noticed recently that all markets are moving together?  U.S. Treasuries, domestic and foreign stocks, Greek Bonds, EM Debt, commodities, and foreign currencies all in lockstep? This … Continue reading →

Posted in Bonds, BRICs, Commodities, Credit, Currency, Equities, Gold, Monetary Policy, News, Policy, Sovereign Risk | Tagged , , , , | Leave a comment