Bond

"All Eyes On Central Banks" In September, But "No Reason To Smile"

September will be quite a busy month for investors since there are around 30 major central banks meetings scheduled. Since the Bank of England’s last policy announcement, the total monthly amount in global official quantitative easing has reached almost $200 billion, which corresponds, for the purpose of comparison, to Portugal’s annual GDP in 2015. Long-rumoured and oft-discussed, QE infinity is now a reality.

"I Am Frustrated And Down" - Abe Advisor Admits That Abenomics May Fail

One day after Koichi Hamada, one of Shinzo Abe's inner circle of economic advisors, suggested that the BOJ should monetize foreign bonds, admitted that "I’ve studied economics for more than 50 years and I’ve believed that what works in the world mostly works in Japan as well," Hamada said at a seminar in Tokyo, later admitting that "in the past six months, I’m starting to see there is potential that Abenomics may not work well."

Bubbles And Elevators: From FONC To F##K!

Volumes have been written on behavioral finance and the seemingly “irrational” decisions investors tend to make to avoid straying from the herd. This article examines a current example coined “FOMO” (fear of missing out), in today’s texting parlance. Through a better understanding of the psychological dynamics of bubble mentality, we hope to help investment managers better grasp the complex role they must play when their concern for poor expected returns and higher levels of risk  are pitted against their client’s fear of not keeping pace with the market.

Trump In Mexico Dials Back Criticism, Did Not Discuss Who "Will Pay For The Wall"

During his surprising meeting with Mexico's president , Donald Trump called for the end to the "humanitarian disaster" of illegal immigration as he sought to strike - and according to many achieved - a presidential tone during a visit to Mexico on Wednesday.  "This is a humanitarian disaster — the dangerous treks, the abuse by gangs and cartels and the extreme physical dangers — and it must be solved."

The Mass Escape From Reality

"Built into the speculative episode is the euphoria, the mass escape from reality, that excludes any serious contemplation of the true nature of what is taking place..."

In Historic Event, China Sells First World Bank SDR-Denominated Bonds In Decades

In one of the most closely followed bond issues in recent history, overnight the IBRD, one of the five member-institutions of the World Bank Group, sold 500 million SDR-denominated three-year bonds carrying a coupon of 0.49% at an auction in China's interbank market on Wednesday. This was the first SDR denominated offering in three decades, with the issuance symbolically taking place in Shanghai one month before the official inclusion of China's currency in the SDR basket. 

Futures Flat, Global Stocks Rise As Treasury Yields See Biggest Monthly Jump In Over A Year

The August market doldrums were on display on the last day of the month as S&P futures were fractionally lower on non-existent volume, while both Europe and Asia were modestly in the green; ten-year Treasury yields headed for the biggest monthly jump in more than a year while the dhe dollar gained for a sixth day against the yen in the longest winning streak since March. European stocks advanced for a second day, adding to a monthly gain as oil trimmed its advance in the best month since April.

An Academic Tries To Explain The Yield Curve, Says "Gloom" Is Irrational

To the academics, “gloom” is irrational and thus requires translation into math to become somehow backwards explanatory for why the economy that “should be” isn’t. In the actual economy, “gloom” is properly called reality. In this world, people know all-too-well that jobs disappeared during and after the Great Recession and never came back. No amount of asset price manipulation can possibly make up that difference. This math is finally welcoming economists to that long run, a place their patron saint, Keynes, said didn’t exist.

Michael Lewitt: "We're In The Late Stages of Ponzi Finance"

“They’ve tried to solve the debt crisis by printing trillions of dollars of more debt, and somehow they expect the economy to grow under the weight of those burdens. We’re just borrowing new money to pay back old money. I would say that we’re in the late stages of Ponzi finance.”

Stanley Fischer's Bizarre Justification For Negative Rates

"Well, clearly there are different responses to negative rates. If you’re a saver, they’re very difficult to deal with and to accept, although typically they go along with quite decent equity prices. But we consider all that and we have to make trade-offs in economics all the time and the idea is the lower the interest rate the better it is for investors."

What Really Happened Among The Ja'ss Holes?

“We still have plenty of tools,” remarked a spokesperson: “Janet Yellen, Mark Carney, Andy Haldane, Mario Draghi – does any remote, unelected bureaucracy anywhere in the world have a bigger set of tools?”

Deutsche Bank Calculates How Much Of The S&P's Value Is Due To Central Banks

If the ERP is responsible for 92% of the S&P500 move since 2012, or just over 800 points, that would imply that central bank policies are directly responsible for approximately 40% of the "value" in the market; any moves to undo this support could result in a drop that leaves the S&P in the neighborhood of ~1,400.