Posts Tagged ‘MBS’
May 22, 2013
When the Jazzman’s Testifying
A Faithless Man Believes
He Can Sing You Into Paradise
Or Bring You to Your Knees
–Carole King
Last night’s BLOG warned that the Twitter feeds would create great volatility as the Fed chairman appeared before the Joint Economic Committee and the markets were not disappointed. The precious metals, currencies and stocks all initially staged impressive rallies, until the questioning turned to the Fed’s plans to TAPER the large-scale asset purchases. Bernanke’s testimony was basically a rehash of NYFRB President Dudley’s speech from yesterday. In the prepared TEXT the chairman made it known that “withdrawing policy accommodation at this juncture would be highly unlikely to produce such conditions” (in referring to when the economy would be sound enough to have sustainably higher rates). Further, “a premature tightening of monetary policy could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further.”
Tags:Ben Bernanke, Fed, MBS, SNB, Thomas Jordan, William Dudley, Yen
Posted in Currency, Fed | 3 Comments »
May 21, 2013
This week has been loaded with FED OFFICIALS filling the airwaves with thoughts about ending QE or just tapering, with the markets left to discern how, when and how much. Today, the NY FED President presented a speech at the Japan Society in New York City, titled, “Lessons at the Zero Bound: The Japanese and U.S. Experience.” President Dudley compared and contrasted the mistakes made by the Japanese and U.S. monetary authorities and what they had been able to learn from each other. The speech was not critical about recent Japanese monetary moves, which infers that the FED is very comfortable with current BOJ policy. The NYFRB president does tell seem to support Chairman Bernanke in being a ’37er, meaning the FED cannot allow the mistakes made in 1937 by the U.S. Treasury and Federal Reserve Board to recur. This belief emphasizes that deflation is the most powerful variable that can disrupt the political economy.
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Tags:algo trading, Ben Bernanke, BOJ, Fed, FOMC, MBS, portfolio balance channel, QE, shadow banking, William Dudley, zombie banks
Posted in BoJ, Fed | 4 Comments »
April 22, 2013
First, I need to clear the air on an issue that is cited over and over, of which causes me great discomfort. In last Thursday’s Financial Times, Robert Pollin and Michael Ash, the two professors who sponsored graduate student Thomas Herndon of UMass-Amherst–and of recent fame for finding the flaws in Rogoff/Reinhart–published the article heard round the world: “Why Reinhart and Rogoff are wrong about austerity.” I am not disputing the results of their work but I am questioning a causal relationship that they note:
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Tags:Euro, Fed, GDP, Gold, IMF, Italy, MBS, Rogoff/Reinhart, SNB, Spain, Switzerland, U.S. Treasuries
Posted in Austerity, Europe, Switzerland | 4 Comments »
December 13, 2012
Well, the famed modeler from M.I.T. has finally admitted that he has been an avid reader of Notes From Underground and in the world of global macro finance, 2+2=5. The FOMC statement was a surrender to the work of Michael Woodford as was pre-released in a Janet Yellen speech a few weeks ago. The FED will give great credence to a 6.5% unemployment and a 2% inflation threshold, give or take a 0.5% discretionary prerogative. The 6.5% unemployment threshold is also subject to FED discretion for it seems to depend on whether or not the labor participation rate is increasing while the unemployment rate declines.
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Tags:Ben Bernanke, BOJ, EUR/CHF, FOMC, Gold, gold/euro, gold/Swiss, Janet Yelln, MBS, Michael Woodford, QE4, Shinzo Abe, SNB, Thomas Jordan, U.S. 10-Year Note, Yen, yen/dollar, ZIRP
Posted in BoJ, Currency, Debt Market, Fed, Japan, SNB | 5 Comments »
September 23, 2012
A an op-ed piece in last weeks WSJ created a great deal of buzz in the financial media. Appearing a few days after the aggressive move by the FED, the opinion piece written by five eminent economists–George Schultz, Michael Boskin, John Cogan, Allan Meltzer and John B. Taylor–criticizes the Bernanke Fed’s QE policy from many different aspects. It is not the criticism that is significant but rather the stature of the economists that are calling the question of the FED’s continued one-dimensional response to the tepid growth following the deep recession of 2007-2008. The media would have the public believe that the only economists qualified to theorize on the problems at hand are those chosen by the FED and its research staff. The financial media bowed to the altar of Alan Greenspan– the Maestro, Oracle and whatever else–and thus the cult of personality was thrust upon the markets.
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Tags:Allian Meltzer, Bernanke, ESM, Fed, FOMC, George Schultz, Gold, IOER, John Cogan, John Taylor, John Williams, MBS, Michael Boskin, operation twist, QE, QE3, repo, Richard Fisher, shadow banking market, Spain
Posted in Central Banks, Debt Market, Spain | 5 Comments »
September 19, 2012
And by the end of trading the YEN had reversed its initial weakness and wound up stronger–the 24-hour trading range was 79.20-78.25, with the settlement at 4:00 p.m. CST, 78.37. It seems that the market will not allow the BOJ (Bank of Japan) to do less than the ECB or the FED. BOJ Governor Shirakawa raised the asset purchase program to 80 trillion YEN from 70 trillion and removed its 0.1% bidding floor for Japanese Bonds (JGB). It is now possible that the BANK will go to negative bids on its JGB buying program so the move was aggressive for what has been a very conservative policy-oriented institution. Even Japanese FINANCE MINISTER Jun Azumi said, “The BOJ took more action than we anticipated.” And again although the YEN weakened on the initial news, by day’s end it reversed and closed strong. Mama, don’t let your children grow up to be currency traders.
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Tags:BOJ, China, ECB, Fed, FOMC, Jeffrey Lacker, JGB, MBS, Mexican peso, NAFTA, QE, Yen, Yuan
Posted in Central Banks, Currency, Japan, Mexico | 8 Comments »
September 13, 2012
First, as I read the FOMC statement, it was painfully obvious that the impact of the Michael Woodford piece found willing adherents in the bowels of the Board of Governors of the Federal Reserve. The FED’s language: “IF THE OUTLOOK FOR THE LABOR MARKET DOES NOT IMPROVE SUBSTANTIALLY, the committee will continue its purchases of agency mortgage-backed securities …” Further, in a direct BOW to Woodford: “The committee expects that a HIGHLY ACCOMMODATIVE STANCE OF MONETARY POLICY WILL REMAIN APPROPRIATE FOR A CONSIDERABLE TIME AFTER THE ECONOMIC RECOVERY STRENGTHENS.”
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Tags:asset buying, Bernanke, BOJ, Draghi, ECB, Fed, fiscal cliff, FOMC, MBS, Michael Woodford, NGDP, output gaps, QE, transmission mechanism, U.S. Dollar, U.S. yield curve, Yen
Posted in Fed | 17 Comments »
March 12, 2012
Tuesday brings the release of the FED’S FOMC STATEMENT. Will it see its shadow or will the light be blocked by an extended period of darkness? Since the January 25 statement that announced the FED‘s intentions of holding rates at ZERO until mid-2014, the employment situation in the U.S. has improved, Europe has been “RESOLVED” and China has lowered reserve requirements. In the same time frame the S&Ps HAVE GAINED ALMOST 4%, while 10-year notes are virtually unchanged in price. Let us all bask in the success of Chairman Bernanke’s PORTFOLIO BALANCE CHANNEL. What now?
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Tags:Bernanke, Brazil Real, Carmen Reinhart, China, Dilma Rousseff, Fed, financial repression, FOMC, MBS, portfolio balance channel, reverse-repos
Posted in Fed | Leave a Comment »
February 12, 2012
Yes, I know Athens is burning as some of the more violent demonstrators threw some Molotov cocktails and the media was given some photo ops so the situation can be understood by those too involved with life’s challenges to read. If that sounds acerbic it is because I have been writing about the Greek debt crisis since December of 2009 when the Chinese investment funds reneged on a promise to purchase $25 Billion of Greek bonds and the debt crisis was in full swing. Again, Athens may be the present battleground but the political and financial games are being played out in Paris and Berlin and of course in the offices of the IMF.
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Tags:Angela Merkel, austerity, bond holders, China, EU, Europe, George Soros, Greece, IMF, MBS, pension funds, Timothy Geithner
Posted in China, Europe, United States | Leave a Comment »
January 10, 2012
One of the most important elements to the purpose of the financial markets is to be an indicator of flawed policy. If money is too loose, the BOND VIGILANTES will assure policy makers that it is time to tighten by pressuring BOND YIELDS higher. As Bill Clinton’s attack dogJames Carville so elegantly stated: “I want to be reincarnated as the bond market because it intimidates everyone.” The huge FED QE PROGRAM has temporarily castrated the BOND market as FED INTERVENTION means that the BOND VIGILANTES lack the fortitude to signal the markets. Even the EUROPEANS have momentarily silenced the market by the huge liquidity pump via the LTRO program with another LTRO coming at the end of February.
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Tags:bond vigilantes, bond yields, dollar swap, Fed, financial repression, James Carville, JGB, MBS, money market funds, Philipp Hildebrand, QE, SNB, swissie, William Dudley
Posted in Debt Market, Fed, Japan, United States | 10 Comments »
