Archive for March, 2016

TIPS Breakevens Surging

Sunday, March 20th, 2016

Via the FT: Investors snap up inflation-proofed Treasury bonds by: Robin Wigglesworth, US Markets Editor Investors have rushed to snap up inflation-proofed US government bonds in the wake of last week’s Federal Reserve meeting, which analysts say indicated that officials are willing to tolerate higher inflation before tightening monetary policy more aggressively. The recent ...

Dysfunction in the Treasury Market

Sunday, March 20th, 2016

Interesting article and a thanks to Steve Feiss at Government Perspectives for the heads up on this one. Via Bloomberg: March 20, 2016 — 6:00 PM EDT The world’s biggest bond dealers are getting saddled with Treasuries they can’t seem to easily get rid of, adding to evidence of cracks in the $13.3 ...

Deadbeats in China

Sunday, March 20th, 2016

Via Bloomberg:   Not since 1999 have China’s companies had so much trouble getting customers to actually pay for what they’ve bought. It now takes about 83 days for the typical Chinese firm to collect cash for completed sales, almost twice as long as emerging-market peers. As payment delays spread from the industrial ...

Too Much Debt In China

Sunday, March 20th, 2016

Via the FT: China’s central bank governor has warned that the country’s corporate debt levels are too high and are stoking risks for the economy, just as highly-leveraged Chinese companies have gone on an overseas takeover binge. Adding his voice to a recent chorus of concern by senior Chinese officials, Zhou Xiaochuan, ...

Plaza Accord Redux?

Saturday, March 19th, 2016

Via Bloomberg: Pimco adviser says actions suggest tacit deal in Shanghai Other analysts are skeptical that moves are coordinated Policy makers across the world are acting in ways that suggest there may have been more to last month’s Group of 20 meeting in Shanghai than mere platitudes about promoting global economic growth.   In the ...

Just Crazy

Friday, March 18th, 2016

Via Bloomberg; March 18, 2016 — 12:03 AM EDT Japan’s 10-year bond yield dropped to a record minus 0.135 percent, meaning the benchmark rate is now below the negative deposit rate introduced by the Bank of Japan last month. The yield on the 0.1 percent notes maturing March 20, 2026, dropped as much ...

Central Banks Running Out of Ammo

Thursday, March 17th, 2016

This article reminded me of these couple of lines from a Yeats poem (on Saint Patrick's Day) which I posted regularly at the height of the crisis in 2008 and 2009: Things fall apart; the centre cannot hold; Mere anarchy is loosed upon the world, The blood-dimmed tide is loosed, and everywhere The ceremony ...

Public Pension Fund Agonies

Thursday, March 17th, 2016

This is a rather disturbing article at the FT regarding the parlous state of public pension funds, of which many face parsimony and penury. Via the FT: Analysis of 56 US public pension schemes has found that their funding deficits are set to grow by hundreds of billions of dollars this year, ...

“A Limit to Monetary Policy Divergence”

Thursday, March 17th, 2016

Via Bloomberg: March 17, 2016 — 8:34 PM EDT Treasury yields dropped back toward those on German and Japanese notes as Barclays Plc said the Federal Reserve seems to have accepted it can’t raise short-term rates when global peers are easing. The premium 10-year yields offer over comparable notes in Germany and Japan ...

More Data Analysis

Thursday, March 17th, 2016

Via Stephen Stanley at Amherst Pierpont Securities: Initial unemployment claims rebounded by 7,000 to 265,000 in the week ended March 12.  The noise around the spring break filers in NY a few weeks ago inflated the 277K figure two weeks ago and depressed last week’s 258K reading.  The average of those ...