Christopher Whalen

QE & Dollar Debt Deflation

New York | The rally in risk-free bonds is quickly rendering irrelevant the policy direction of the Federal Open Market Committee. We’ve talked in past comments in The Institutional Risk Analyst about the structural shortage of risk-free collateral, even with bond yields down 50% from the November 2018 peak. As fear of the economic effects…

Are US Banks Facing a Credit Trap?

Punta del Este | As we head into Q4 2019 earnings next week, US financials have never been so expensive and risk indicators have never been so skewed. Just as last July we called the problems brewing in the short-term money markets in a discussion on CNBC’s Halftime Report with Mike Mayo of Wells Fargo…

Repo Madness: The Rest of the Story

New York | The Federal Open Market Committee cut the target for short-term funds another quarter point last night, raising the question as to whether the central bank can actually defend the 1.75% upper bound of the new policy range. Fact is, demand for short-term funding is pulling rates higher as the year draws to a close.