Foreign Central Banks

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."

The Next Market Crash Will Not Be Televised

"In the end, just like 1987, 1998, and 2008, the taxpayer will end up holding the bag. They will never see the crash coming... and modern television will cover it much like they did in 2007 and 2008: After the financial nuclear bomb has already gone off."

Mediocre, Tailing 7Y Auction Prices At Lowest Yield Since October

After a strong 2Y auction on Monday, a poor 5Y issuance on Tuesday, today the Treasury concluded this week's bond issuance with the sale of $28 billion in 7Y paper in a mediocre auction, which probably could have been even worse had it not been for Draghi's "clarification".

How The Fed Helps The US Spy On Foreign Governments

It's widely known that the Federal Reserve has been tasked by Congress with a "dual mandate" to maintain maintain stable consumer-goods prices, low unemployment and - oh yeah - buoyant equity prices.  However, as Reuters revealed on Monday, the central bank has another legally binding obligation that might upset some of its clients: Helping US intelligence agencies spy on foreign governments.

Reflexivity And Why The Fed Must Sell The Long End

"If the Fed were to just let its balance sheet 'run off', it would cause additional pressure on short-term interest rates even as policy rates are rising. It could also potentially invert or further distort the front-end of the yield curve and destabilize the money markets... It would, therefore, behoove the Fed to sell some of its longer dated Treasury holdings to steepen the yield curve."

10 Year Auction Tails Despite Strongest Foreign Central Bank Demand Since January

Following the earlier blockbuster 3Y auction, moments ago the US followed up with today's second auction, a 9-year-11-month reopening of CUSIP X88, in which $20 billion in paper was sold, once again largely to willing foreign bidders, which however unlike today's earlier auction priced at a high yield of 2.195%, tailing modestly the When Issued of 2.188% by 0.7 bps.

The Fed Is About To Hike: Why That Is Bullish For Bonds

Contrary to conventional wisdom, Treasuries have rallied following the last three rate increases. Instead of sending yields higher, the hikes are driving speculation that rising short-term borrowing costs will curb the economic expansion and make it tougher for the Fed to sustain its 2% inflation target.