The coming turmoil in the US Treasury’s bank account at the Fed will have a huge impact on bond prices in particular, and thus yields. It will also have an impact on stock prices that won’t be pretty. The good news is that we already know exactly how the turmoil will play out. We just…
The failure of European bank assets to grow over the period that negative interest rates and QE have been in force in Europe shows that the monetary transmission mechanism is broken (if it ever worked at all). ECB policy has failed miserably to stimulate growth.
US macro liquidity growth has been very slow in recent months. It has barely budged since last August. In contrast, stock prices have risen 9% over the same period. Stocks are now most overbought they have been relative to macro liquidity since 2010 when the Fed was actively pushing stock prices higher.
Earlier today I posted this in a rush with a bad link and then left for the day. Fortunately, many of you let me know. I am thankful for the interest, and I apologize for the error! It has now been corrected. Key banking indicators are at or approaching major inflection points. If the banking…
The European banking system is dead in the water in spite of massive ECB QE and NIRP. Here are the ugly details, and what they mean for the US.
US macro liquidity growth slowed over the past month. It has barely budged since August 10 of last year, actually slipping 0.2% since then. Here’s what that means for the market.
Regular bank reserve deposits, called “Other deposits held by depository institutions” rose by $239 billion in the January 4-February 8 period. Whoa. Where’d all that cash come from?
The ECB continues to buy €65 billion per month in bonds from European banks. But the European banking system is shrinking, not growing. That poses grave risks.
US macro liquidity growth slowed over the past month. In fact, it has barely budged since August, rising only 0.2% since then. In contrast, stock prices have risen 4.5% over the same period. Stocks look the most overbought they have been relative to macro liquidity since May of 2015. That was a good time to…
The Fed’s policy of “raising interest rates” by paying the banks a bigger subsidy is not a tightening. It’s just the opposite, and it’s going to show up in continuing, if not increasing, monetary growth.