EuroDollar

No Need For Yield Curve Inversion (There Is Already Much Worse Indicated)

The bond market selloff of the past month or so, which has apparently fizzled just as Alan Greenspan was assuring the world it was only getting started (once more preserving for posterity how little he knows about bonds, interest rates, and money, as if knowing anything about any of those would be useful to a central banker). There is no bond market riddle. As each curve gets squashed by righteous pessimism, they together indicate nothing good about the near-term future.

It's Not Really About Deutsche Bank

It is never a good thing when official sources either named or unnamed are quoted in the media as denying bailout discussions. For any bank such rumors and denials are harmful because, obviously, they are a reflection of common perception. Furthermore, most people know all-too-well the true nature of any denials, thus reinforcing only that much more the troubling perceptions in the first place.

Raoul Pal: Business Cycle Tinder For A Global Banking System Fire

"...after every single two-term presidential election (i.e. when the incumbent changes) and there is a 100% track record of a recession within the next 12 months. It either starts just beforehand or starts afterward, but within 12 months there is a 100% chance of a recession... Even if they do raise rates, the yield curve will flatten like crazy... I think the Fed is almost an irrelevance at this point."

In His Own Words: From Maestro To Mea Culpa

Alan Greenspan is shamelessly trying to get ahead of what he seems to be calling the mob, the crazies who at some point will start digging into what he actually did at the Fed rather than simply accepting the myths that he still manages to live by.

Dear Janet... TED Spread Confirms 'Risk', Not 'Policy' Is Driving Rates

Once again FOMC policy is at odds with what is taking place in deeper and far more intellectually-sound money markets. The TED spread confirms risk not policy as the underlying mechanism, while the eurodollar futures price reveals the growing pessimism about what that could mean for the intermediate and long terms in real economic conditions.

Why The Fed Will Never Reduce Its $4.5 Trillion Balance Sheet Again

While policymakers have maintained the Fed should eventually reduce its bond holdings, Lockhart said some officials were closer to accepting that they needed to learn to live with them. "I suspect there are colleagues who are contemplating at least maybe a statically large balance sheet is just going to be a fact of life and be central to the toolkit," he said. Most now agree with him.

The Reckoning Looms - Central Bankers Really Don't Know What They're Doing

What is happening this year is astounding. After saying year after year after year that the recovery is coming, and even doing so to the point of condescension, the admissions of wrongfulness are starting to roll in, if only softly at first. How ludicrous does “transitory” look now?

Fed Admits Another $4 Trillion In QE Will Be Needed To Offset An "Economic Shock"

"Large-scale asset purchases and forward guidance about the future path of the federal funds rate have almost no ability to offset a shock in current circumstances, but down the road may be able to provide enough additional accommodation to fully compensate for a more limited [ability] to cut short-term interest rates in some, but not all and maybe even not most, circumstances."

Jeffrey Snider: All Signs Point To Systemic Reset

"... what’s happened in stocks is more a myth than actual reality. Investors in stocks are buying at ridiculous valuations based on the premise that the Fed can create a recovery through liquidity. And what 2014 and 2015 show us is that this simply wasn’t true! ...the longer the earnings recession lingers, the higher the risk that stock investors will realize that they’ve been following the wrong story all along!"

The Fear Economy: It Couldn't Possibly Happen Here But It Did

In the late 1990’s, economists attempted to get reacquainted with something that they previously believed was an artifact of long ago history. The plight of Japan during that decade had revived fears of deflation and depression. Some economists, those daring enough to challenge entrenched notions, began even to contemplate whether or not it could happen here.

What To Expect When You're Expecting The FOMC

As we await today’s FOMC decision, Bloomberg's Richard Breslow has been struck curious by how many people are speculating that the accompanying statement might lurch back hawkish. For a Fed that has had such notable lack of success seeing clarity in its crystal ball, that would be remarkably aggressive.

"Policymakers Have Been Calling A 'Depression' A 'Recovery' For Nearly A Decade"

"I'd like to think that logic and reality will prevail; that distaste for being told how great the world is has become sufficiently revolting and obviously false to stir the world’s populace to end the imbalances. But that, again, will take time, perhaps a good deal of time; until then, whenever it hopefully is, central banks continue to operate with impunity even though the risks of their intemperance rise exponentially..."