...conviction was stronger on the way down than on the way up, and that’s a worrying sign... but on volume alone, this bear market doesn’t appear to be over...
"These enormous Fed purchases combined with rates moving sideways in recent weeks make you wonder where 10-year rates would have been if the Fed had not intervened."
Ash Bennington hosts Ed Harrison, Real Vision’s Managing Editor, to break down the week’s events. The pair cover the U.S. banking sector, risks to the commercial real estate market, Russian central bank policy action, and compare and contrast the timing and trajectory of the COVID Crisis to the GFC. Bennington and Harrison end on a discussion of the changing role of China in the global political and financial system in the wake of the current crisis. In the opening section, Jack Farley looks at finance stories that you might have missed, scrutinizing the extreme price action in a small cap stock, and exploring the significance of gold's recent trend towards backwardation.
"The Covid-19 crisis is offering the opportunity for me to exit deflationary positions. We have sold all our government bonds, and I am now trying to short assets that have benefited from very low interest rates..."
Roger Hirst and Ed Harrison discuss FX markets, high yield credit, and EM fixed-income through the lens of Brent Johnson’s “dollar milkshake theory” and Mike Green’s thoughts on the concentration of capital. Harrison and Hirst analyze the impact that the Fed’s yield curve control will have on net interest margins for banks and whether central banks will draw a “line in the sand.”
State Street is now selling equity ETFs that it believes the Fed will soon be buying - arguably as soon as the next crash when Powell will start buying stocks - with which the Fed's takeover of all markets is now complete.
In 2020, once again it seems, history is repeating itself but on an even more massive scale. Private financial interests, not the American people, are deciding what to do with trillions of dollars of public money...
US equity futures are soaring after-hours following headlines from STAT news that Gilead Sciences' experimental drug remdesivir is “seeing rapid recoveries in fever and respiratory symptoms.”
"Even beyond this next period, guidance from health experts is that it won't be advisable to have large groups of people get together for a while. Given this, we're canceling any large physical events we had planned with 50 or more people through June 2021."
