Jump to content

JEast

Member
 View Profile  See their activity

  • Posts

    750

  • Joined

  • Last visited

 Content Type 

Posts posted by JEast

    “Macro” Musings II

    in General Discussion

    Posted

    So large inflation usually happens when the central bank starts funding teh government with free money. That is how they push money in the system.

     

    In text books, that is what happens.  However, central banks only have the logistics of "pushing" money into the system via the help of others (e.g. profit seeking banks).  Currently in the US, those banks are are not pushing much into the system.

     

    The former FED Chairman was nicknamed "Helicopter Ben" - and from a logistics point of view, I have always thought that the FED should have rented about 100 chinooks and literally dumped money over the largest 20 metropolitan areas.  That would have spurred inflation much quicker!!  Alas, the electronic currency is still sitting quietly on a server somewhere with nowhere to go.

     

    Insurance Problems Seem To Never Go Away (TIG)

    in Fairfax Financial

    Posted

    It has been nearly 15-16 years since the TIG saga began and was used as a case of argument by the shorts over the years.  Prem and company finally took the pen away from the Dallas office in mid 2000, but the damage had been done. Just another reference point that sometimes an insurance problem hardly ever goes away.

     

    However, I had not heard about the Argentina problem and their recalcitrant effort to not pay for the last 14 years.

    http://www.bloomberg.com/news/2014-10-10/argentina-may-ignore-bond-judge-sanctions-tig-case-shows.html

     

    Cheers

    JEast

    “Macro” Musings II

    in General Discussion

    Posted

    Here is something we value folks do not pay very much attention to, 5-year forward looking inflation swap expectations -- but interesting.  Roughly stated, for the last 10 years the US break-even point was about 300bp. 

     

    http://i61.tinypic.com/30vfy15.png

     

    In Europe last week, the break-even was below 200bp and dropping.  Meaning the consensus is now predicting year/year inflation to be very low indeed.

    “Macro” Musings II

    in General Discussion

    Posted

    I wouldn't read into the USD/JPY rate too much.

     

    Maybe one should not read too much into the USD/JPY rate too much, but what about the Baht, Ringgit, Rupiah, and AUD since September 1st.  I do not believe these currencies are used in the carry trade.

     

    On the other side of the pond, latest inflation data out.

     

    http://i62.tinypic.com/vhco4p.png

     

    Ref: http://www.zerohedge.com/news/2014-09-30/eurozone-inflation-drops-fresh-5-year-low-eurusd-tumbles

    “Macro” Musings II

    in General Discussion

    Posted

    As the ¥en approaches the USD/JPY of 110, I believe we have entered a new phase.  A new chapter in the sense, that (though they should) other Asian countries will not just sit by and do nothing.  They too will start to join the fight to keep exports up and start exporting non-inflationary impulses across the seas with their currency lowering efforts.

     

    I know and not to insult, but the whippersnappers are sure to say I see inflation all over the place.  You are probably correct from an individual perspective, but not in the fullness of the aggregate. Your extra 5¢ on tomatoes does not compare to Boeing lowering a $300m plane by 5%, or Nissan lowering their retail prices by 7%.

     

    Anyway, just thought it time for a new thread on the macro drama.

     

     

    Cheers

    JEast

     

    "Macro" Musings

    in General Discussion

    Posted

    The drama continues as we appear to have entered Act 2 with PBOC's new mini-QE prior to a scheduled FED announcement (read as not coincidental).  As such, currencies are tanking against the USD.

     

    Just a thought. When the USD was deflating, it spread global commodity inflation. If Asian currencies are now deflating in a race to the bottom, will that result in exporting global deflation??

    "Macro" Musings

    in General Discussion

    Posted

    As this thread is about 'musings' or contemplation, are the last few weeks in the macro world a tipping point to use an over used phrase?  Started with Bunds at negative rates last year, then the ECB went negative, followed by BOJ going negative a few days ago, and today Swiss National Bank has gone negative. Topsy/Turvy indeed. 

     

     

    Currency wars in the race to the bottom anyone?

     

×
×
  • Create New...