Eurodollar University

Bank of England's Chief Economist tells Columbia University podcast that people need to accept that they're poorer and worse off, and to stop trying to do anything about it because they're getting in the way of central bankers attempting to fix a mess they can't seem to fix. While they're afraid of a wage-price spiral there's no evidence they should be afraid of, the costs of the past few years ar...

Major buying the curves has pushed them back down to and even below the worst points since mid-March. Markets have never been more certain about what's coming and why. Since eurodollar futures are no more, we'll have to depend on 3-month SOFR futures from here on. And right here they're beyond pessimistic.  Eurodollar University's Money & Macro Analysis Bloomberg: Hedge Funds Place Biggest Eve...

The transmission from deflationary money to a deflationary economy was always going to come from a credit crunch. Updated data shows the banking system remains in a critical state which means taking proactive steps to freeze their collective activities in broad fashion. So much, even the mainstream media is reporting the gory details.  Eurodollar University's Money & Macro Analysis A Corporate...

According to one source, tourism/attendance at Disney's main theme park in Orlando already dropped off a cliff. Hardly a surprise, the primary risk to the global economy - not just US - isn't inflation but the deflationary money the banking crisis revealed to the public spilling over and causing major downside consequences. Slowly, at first.  Eurodollar University's Weekly Conversation w/Steve Van...

Something is going on with bills. There's a debt ceiling deadline looming. Two must be related, says the mainstream, otherwise the former would mean something bad and Jay Powell said nothing bad could happen - more than the other stuff that already did, of course.  Eurodollar University's Money & Macro Analysis Quantitative Easing: How Well Does This Tool Work? https://www.stlouisfed.org/publi...

Four-week bill yield plummeted by around 60 bps at one point in today's trading. Serious monetary pressures are still there, continue to get worse even a month after the mid-March banking crisis and several weeks after officials declared it over with. They want to go back to focusing on inflation that doesn't exist for the deflation which is really starting to rampage. Eurodollar University's Mone...

Like Warren Buffett last week, this week Elon Musk issues grave warning about health of global banks. But why? Is it inflation run amok, or the world paying in deflation for the past few years of massive distortions? Eurodollar University's Money & Macro Analysis Elon Musk Interview w/Tucker Carlson https://www.foxnews.com/video/6325259104112 Q1 2023 J B Hunt Transport Services Inc Earnings Ca...

Brazil's President Lula traveled to Shanghai to finalize bilateral engagement bypassing the US dollar. This is not de-dollarization, rather an acknowledgement the eurodollar system is in a crisis. And that means the dollar goes up, probably way up, wrecking everything along the way. Can't blame Brazil (or China) for trying to dodge it. Eurodollar University's Money & Macro Analysis Bloomberg:...

Where are we? Is there still a crisis? Is it over(blown)? The "fear ratio" helps sort out signal from so much noise. Since it sits at the intersection of money, finance, and especially real economy, it's determination shouldn't be taken so lightly.  Eurodollar University's Money & Macro Analysis Twitter: https://twitter.com/JeffSnider_AIP https://www.eurodollar.university https://www.marketsin...

The hawks are back at the Fed doing what Fed hawks always do. Beginning with overestimating their own tools, they then overestimate the resilience of the banking system before also overestimating how great the economy is because of the unemployment rate. Never mind they didn't see any of this coming, they assure you there's nothing else coming.  Eurodollar University's Money & Macro Analysis F...

This week was a wild one, including how during it legendary investor Warren Buffett said he was selling bank stocks because there were more failures still to come. While depositors won't see any losses, that doesn't mean there won't be any. Nor fallout from it, as the latest data from markets and macro shows.  Eurodollar University's Money & Macro Analysis Twitter: https://twitter.com/JeffSnid...

First they said it was a growth scare. They told us to ignore inversions. Then they pointed to the unemployment rate and said there's no way we could have a recession. Now they admit there will be a recession but also how there's a chance for worse. In other words, they're following market curves like we said they would and have finally arrived just one step short of inevitable.  Eurodollar Univer...

Just as the interest rate swap market had indicated, big collateral scarcity as 4w Tbill rates yesterday plummeted. Also, Japanese bills for more confirmation. Add those to the US CPI results for March and together they more than equal the end of 'inflation'. Eurodollar University's Money & Macro Analysis Austan D. Goolsbee, president and chief executive officer, Federal Reserve Bank of Chicag...

Alarming compression of interest rate swap spreads indicate more systemic issues in global balance sheet capacities and collateral, too. Also, the IMF reported on its World Economic Outlook where it very plainly reveals just how worried authorities have become.  Eurodollar University's Money & Macro Analysis IMF WEO April 2023 https://www.imf.org/-/media/Files/Publications/WEO/2023/April/Engli...

The Federal Reserve's H.8 data on US commercial banks shows just how much of a systemic shock the March seasonal bottleneck had produced. Institutions got hit with historic levels of deposit declines, emergency borrowings like nothing before, and because of it massive fallout followed - and continues to follow.  Eurodollar University's Money & Macro Analysis Twitter: https://twitter.com/JeffSn...

Markets are pricing an imminent and sharp drop for interest rates. It's not just about the Fed and rate cuts. But with regard to those, history shows the so-called reaction function flips decidedly when these things happen.  Eurodollar University's Money & Macro Analysis Federal Open Market Committee Conference Call June 5, 1989 https://www.federalreserve.gov/monetarypolicy/files/FOMC19890605c...

For all its bluster, the Federal Reserve very nearly paused its rate hikes last month for obvious reasons. Other central banks already have - two this week - which doesn't bode well for anyone. Another key milestone that curves had been predicting begins to comes true. The "pause" window is now wide open.  Eurodollar University's Money & Macro Analysis WSJ: Latest Fed Increase Came Down to the...

More extreme hedging swept global markets in morning trading, including another serious collateral run. As it did, curves have been distorted to an even more concerning degree than they had been when banks like SVB and Credit Suisse were all over the mainstream. Examining Credit Suisse we can begin to understand why. Eurodollar University's Money & Macro Analysis Credit Suisse’s Fatal Bank Run...

The one thing missing so far from the 2008-style scenario - mass layoffs - hinges entirely on whether businesses believe they can hold out for a second half rebound. As the weeks even days go by, this gets less and less likely. Markets can hear and feel the avalanche of jobs cuts just ahead bringing all the nastiness that will come with it.  Eurodollar University's Money & Macro Analysis Janet...

Led by Saudi Arabia, OPEC announced a surprising round of substantial and "voluntary" production cuts to combat sagging (not surging) crude oil prices. In doing so, the group confirmed every negative suspicion (and so much data) surrounding the economy's chances for this year and into next. Eurodollar University's Money & Macro Analysis Twitter: https://twitter.com/JeffSnider_AIP https://www.e...

China's reopening just might be the last gasp, the final chance to escape the dreaded 2008-style scenario. If it fails, there is nothing left for the world to pin its hopes on. Examining the latest data from China and why it isn't finding any takers. Eurodollar University's Weekly Conversation w/Steve Van Metre Twitter: https://twitter.com/JeffSnider_AIP https://www.eurodollar.university https://w...

Watch Jeff get really fired up over the Federal Reserve Vice Chair Michael Barr's refusal to answer questions about the "central bank's" tools even as he sought more authority from the government to presumably create new ones. The full autopsy on SVB hasn't even been done yet and the utter nerve of these bureaucrats to blame lack of authority for the failure and by implication any fallout.  Eurodo...

The 2008-style scenario requires two parts - bad money and bad economy. We can now more easily see the first of those even if many will refuse to admit it. How about the other? That one isn't hard to identify either, plenty of existing data to choose from.  Eurodollar University's Money & Macro Analysis Twitter: https://twitter.com/JeffSnider_AIP https://www.eurodollar.university https://www.m...

Maybe Governor Bailey was a little too honest when trying to downplay the current situation, confessing to "very heightened tensions." But what are these tensions and why have they heightened? The answers can be found deep in the bowels of big bank footnotes as well as in specific market prices. Eurodollar University's Money & Macro Analysis Bank of England on heightened alert for further bank...

Officials, regulators, politicians will all claim you and I are the problem. They'll begin to tell us bank panics happen because of misinformation and overly emotional depositors. Examples from the recent and distant past inform us about what's already beginning to take place now: finding a way to make it seem what's going on right now really isn't anything to worry about. Eurodollar University's...