Eurodollar University

This was supposed to be all about "inflation" and instead everything is coming up jobs - including the latest CPI report. From Home Depot's most recent admission to now US refiners taking drastic steps to avoid getting caught with an energy glut (yep, that's right), the entire economy flipped from "sticky inflation" to Uh-Oh over employment.  Eurodollar University's Money & Macro Analysis Bloo...

While the world was distracted by US recession provoking a Japanese stock market crash, China was continuing to meltdown. In just the past few days the country reported: a record drop in foreign money fleeing China; the first contraction in bank lending to the real economy in nineteen years; record low market interest rates; and the PBOC going off the rails trying to derail that bond rally. And we...

How in the world does sudden fear over a US recession lead to a crash in Japanese stocks? Even more important, what might that crash suggest about the US recession? Our world is more interconnected than you've been led to believe. Our entire economic worldview is oriented around national groupings not because that’s the way the world works but because it keeps central bankers in a job. What global...

After a chaotic, somewhat panicky prior week, the talking points went out with a clear aim to restore calm. That meant downplaying every last concerning development, starting with Jeremy Siegel. Sure enough, he played along and on it went from there. Even Fed officials know what's coming yet they'll keep denying anything's wrong right up until the first emergency meeting rate cut.  Eurodollar Univ...

Though calm was restored after a wild few days in global financial markets, key market signals remained steadfastly negative. One of the most crucial of those even dropped to a level we've only seen three other times in more than 35 years - all three some of the worst cases. Moreover, that one was corroborated by a record low for swaps also set this week.  Eurodollar University's Money & Macro...

Last week, the markets and the media melted down over well-founded recession fear. This week, in the aftermath, everyone will say it was all overblown. That's just normal. Meanwhile, the actual recession continues to progress and the data keeps showing momentum is all on that side. This includes yet another signal strongly correlated with unemployment. If that wasn't enough, yet more warnings from...

The date July 11 keeps coming up in a lot of different markets, starting with stocks. The Nikkei's last all-time high was on that day and so was the NASDAQ's. But July also features prominently in commodities and even Treasuries. The reason for it confirms so many suspicions about what just happened this past weekend therefore what it means going forward.   Eurodollar University's Money & Macr...

When even big-name mainstream Economists are begging the Fed for emergency rate cuts, you might already have the sense this wasn't just a one-weekend show. US recession scrambles a lot of fundamental perceptions and values, causing a substantial and sizable repricing across asset classes. That repricing just happened to be most obvious and violent in Japan.   Eurodollar University's Money & Ma...

Japan was the epicenter for a wave of liquidations in smashing financial markets all over the world. It had all the telltale signs of a collateral and margin call. This wasn't about Japanese banks or even Japan, rather the sudden realization over the US soft landing narrative going up in smoke triggered a monster repricing and revaluation. So, what does all that mean? Eurodollar University's Money...

The July payroll report confirmed the US economy is heading for trouble. Key parts of it showed recession has likely already begun. As reality dawns across the marketplace, focus turns to what comes next now that the soft landing didn't land.  Eurodollar University's Money & Macro Analysis https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

With the questions of "what" and "when" now mainly answered, we can finally focus on "how bad." To start putting together some answers, we'll use three different markets and sets of indications each examine a separate aspect of the recession proposition; short run, intermediate, and the long term.  Eurodollar University's Money & Macro Analysis https://www.eurodollar.university Twitter: https:...

A whole bunch of bad data, much of it focused on deterioration in the US labor market (pre-July payrolls). That unleashed huge swings in rates markets and forward rates. One reason for all this is the historical pattern is perfectly clear. What we're seeing right now happens EVERY TIME. No exceptions.  Eurodollar University's Money & Macro Analysis FOMC Monetary Policy Statement https://www.fe...

Central banks don't hike rates during a recession. Or do they? The Bank of Japan just did and for the second time. By doing it, BoJ is laying itself bare; both in terms of transparently acting politically and maybe more important exposing the lie about interest rate policies. Peter Pan is not happy.  Eurodollar University's Money & Macro Analysis Bank of Japan Change in the Guideline for Money...

Hiring in the US absolutely plunged in June, so much you really have to see it to believe it. At the same time, global fast food giant McDonalds reported lower same store sales for the first time since 2020. The reason why people can no longer afford to eat as much under the golden arches isn't necessarily price changes, what's changed recently is the alarming retreat in employment.  Eurodollar Un...

A whole lot going on in the eurodollar shadows. Record high repo pool (reverse repo) at the Fed. Bull steepening even more aggressively outside of Treasuries. Primary dealers absolutely hoarding collateral to a degree we haven't seen since March 2020. Banks around the world heavily buying safety and liquidity. The dollar hammering currencies. But why? Eurodollar University's Money & Macro Anal...

According to the latest update, US consumers are out of savings. As nominal incomes have slowed way down, consumers have cut back only somewhat mainly spending on goods - causing the goods recession every big-name company is currently warning over. With unemployment rising and savings gone, there's no margin left even to maintain the current rate of decline.  Eurodollar University's conversations...

Companies around the economy are increasingly warning about the negative effects of the goods recession, one after another missing revenue and sales targets/expectations. The latest from several of the largest global businesses point to deepening macroeconomic setbacks. Even the automobile industry is showing signs of serious weakness, starting with pricing. No surprise commodity markets are sharp...

A majority of Americans believe the US is in recession and has been for some time. Second quarter GDP just came out wildly above expectations. So is everyone wrong? Not quite. In fact, the GDP estimates actually explain why people are so mad, what they are already doing about it, and why that spells trouble for the entire economy.  Eurodollar University's Money & Macro Analysis It doesn’t matt...

The Treasury curve continues to make escalating even decisive bull moves. It's not difficult to see why, as another global consumer company admits its having trouble selling its products and in this case to the more well-to-do segment. In addition, former Fed members are urging immediate rate cuts openly wondering if it might be too late. One neighboring central bank is waiting to find out, unleas...

Replay of the livestream Member Q&A 100 epic discussion. George. Jim. Steve. Mike. Eric. Brent. Emil and Jeff back together again. Two hours of back and forth. Including why Home Alone lied to you. There was so much all in one place. Spirited back and forth between all the fellas, a real deep dive in true Eurodollar University style. Arguing about the past. Angling toward the future. Even a fe...

China's dollar woes have jumped in recent months, so much that they've come out of the eurodollar shadows enough to impact the onshore banking system in an unexpected way. Foreign holdings of negotiable bank CDs have exploded. We'll discuss what that means and how it relates to China's dollar shortage and the surprise set of rate cuts announced by the PBOC earlier today. Eurodollar University's Mo...

To way too many Americans and other workers, this is already a recession of opportunity. Without the major statics yet to show it, mainstream commentary has mocked their plight as a "vibe-cession." Now the data is beginning to more clearly align with the recession "vibe", suddenly even authorities are starting to worry so out comes the rate cuts. As Steve says, that's not what you want.  Eurodolla...

All year all anyone has heard is the Fed and its rate cuts. Soft landings imply a little weakness but no worry, Jay Powell will cut rates once maybe twice and everything will be just fine. The only question is, why on earth does anyone believe this? The evidence and history of interest rate targeting - as you'll see - is indeed 100%, as in total failure. Rate cuts (like hikes) are pure superstitio...

In the midst of other major warnings, here comes another substantial one. Copper has moved way past its supply squeezed record high from just two months ago and is now crashing. At the same time, gold is reaching new heights. The copper to gold ratio therefore just dropped to its lowest since...November 2020. Taking a deeper look at what all this means.  Eurodollar University's Money & Macro A...

Swaps are of paramount importance to the financial world, priced by the very monetary system itself. As a consequence, swap market indications are even more critical than the yield curve. But what does it all mean, and how can you decipher what appear its confusing signals? A few minutes on some manageable basics and you're ready to read the market's big move. Eurodollar University's Money & M...