Foreign Central Banks

Stellar 3Y Auction: Highest Bid To Cover Since Sept 2015, Foreign Demand Surges

Unlike last month's ugly 3Y auction, today's just concluded sale of $24 billion in 3 year paper was stellar, stopping through the When Issued 1.934% by 0.2bps, a surge in buyside demand as the Bid to Cover jumped from 2.76 to 3.15, the highest since September 2015, while Indirect Bidders took down the most since August.

Michael Hudson: America's Monetary Imperialism

"...the conflict between creditors and democracy, between oligarchy and economic growth (and indeed, survival) will remain the defining issue of our epoch over the next generation..."

Ugly, Tailing 7 Year Auction Spooks Market As Foreign Buyers Flee

After one poor and one mediocre auction, today's sale of $28 billion in 7 year paper was a fiasco, stopping at 2.23%, a massive 1.7bps tail to the 2.213% When Issued, if below last month's 2.28% courtesy of the ongoing yield curve flattening which increasingly include the belly of the curve.

"When To Worry?": How Long After The Curve Inverts Does The Recession Begin

Sometimes inversion provides a timely signal for the economic cycle a la 2000, where Professor Curve predicted almost the ding-dong high in the SPX. However the 2006 episode of inversion dished up 7 months of pain for equity bears, with 18% further upside for the SPX. Same for 1989 where equities continued to rally 22% into the 1990 recession...

Is Korea Just A Smokescreen?

"Looking at the bigger picture, it seems more likely that the entire Korean issue is a smokescreen designed to provide cover for a military buildup intended to intimidate or even force China to abandon its challenge to the U.S. dollar. However, China is not Iraq or Libya. It is a major nuclear power."

The Truman Show Markets

"Fake news, fake economies (based on fake demand dependent on asset bubbles), fake markets (dependent on QE and low interest rates). It’s the Truman Show, folks."