tag:blogger.com,1999:blog-83726789769536248332024-03-19T05:32:26.256-07:00 Credit Bubble Bulletin - Chronicling History's Greatest Financial Bubble
Anonymoushttp://www.blogger.com/profile/05346531298334313704noreply@blogger.comBlogger8062125tag:blogger.com,1999:blog-8372678976953624833.post-26847144505815277272024-03-18T21:03:00.000-07:002024-03-19T05:31:55.577-07:00Tuesday's News Links<p><a href="https://ca.finance.yahoo.com/news/asia-stocks-look-mixed-ahead-223805733.html">[Yahoo/Bloomberg] Yen Drops on BOJ’s Dovish Tone, US Futures Decline: Markets Wrap</a></p><p><a href="https://ca.finance.yahoo.com/news/yen-slides-past-150-per-054208154.html">[Yahoo/Bloomberg] Yen Slides Past 150 Per Dollar as Yield Gap With US Remains Wide</a></p><p><a href="https://ca.finance.yahoo.com/news/short-volatility-trades-starting-rule-060000590.html">[Yahoo/Bloomberg] Short Volatility Trades Are Starting to Rule Currency Markets</a></p><p><a href="https://www.reuters.com/business/energy/oil-prices-edge-down-russia-lifts-supplies-jet-fuel-demand-stirs-caution-2024-03-19/">[Reuters] Oil prices edge down as Russia lifts supplies, jet fuel demand stirs caution</a></p><p><a href="https://ca.finance.yahoo.com/news/china-bond-frenzy-roars-back-075920197.html">[Yahoo/Bloomberg] China Bond Frenzy Roars Back as Yield Falls Toward 19-Year Low</a></p><p><a href="https://ca.finance.yahoo.com/news/boj-small-rate-hike-may-100028712.html">[Yahoo/Bloomberg] BOJ’s Small Rate Hike May Have Big Ripple Effect Around the World</a></p><p><a href="https://ca.finance.yahoo.com/news/boj-dovish-tone-first-rate-044641163.html">[Yahoo/Bloomberg] Japan Ends Era of Negative Rates With Few Clues on Further Hikes</a></p><p><a href="https://ca.finance.yahoo.com/news/trading-floors-buzz-excitement-boj-085010594.html">[Yahoo/Bloomberg] Trading Floors Buzz With Excitement as BOJ Axes Negative Rates</a></p><p><a href="https://apnews.com/article/japan-economy-interest-rate-boj-b650a9b8a517bcf3a31c32ffdcf651c9">[AP] The Bank of Japan ends its negative interest rate policy, opting for its first hike in 17 years</a></p><p><a href="https://www.reuters.com/business/finance/boj-ends-negative-rate-policy-2024-03-19/">[Reuters] BOJ ends negative rate policy</a></p><p><a href="https://ca.finance.yahoo.com/news/fed-lot-questions-answer-balance-100000757.html">[Yahoo/Bloomberg] The Fed Has a Lot of Questions to Answer About Its Balance Sheet</a></p><p><a href="https://ca.finance.yahoo.com/news/the-fed-wont-fix-the-housing-market-morning-brief-100046368.html">[Yahoo Finance] The Fed won't fix the housing market: Morning Brief</a></p><p><a href="https://www.reuters.com/technology/nvidias-dizzying-rally-spurs-rush-into-ai-themed-etfs-2024-03-19/">[Reuters] Nvidia's dizzying rally spurs rush into AI-themed ETFs</a></p><p><a href="https://apnews.com/article/wall-street-bonuses-executive-pay-683f021fd9f915286aeceb2127c318d7">[AP] The average bonus on Wall Street last year was $176,500. That’s down slightly from 2022</a></p><p><a href="https://ca.finance.yahoo.com/news/real-estate-pain-showing-obscure-110000637.html">[Yahoo/Bloomberg] Real Estate Pain Is Showing Up in an Obscure Investment Product</a></p><p><a href="https://ca.finance.yahoo.com/news/rba-drops-tightening-bias-holding-035057848.html">[Yahoo/Bloomberg] RBA Drops Tightening Bias After Holding Key Interest Rate</a></p><p><a href="https://ca.finance.yahoo.com/news/ecb-needs-wait-june-vice-063824106.html">[Yahoo/Bloomberg] ECB Needs to Wait for June, Vice President Guindos Says</a></p><p><a href="https://www.bloomberg.com/news/articles/2024-03-19/boj-ends-massive-easing-program-with-first-rate-hike-since-2007?srnd=homepage-americas&sref=eo0IIyEe">[Bloomberg] BOJ’s Dovish Tone After First Rate Hike Since 2007 Hits Yen</a></p><p><a href="https://www.wsj.com/finance/banking/russias-backdoor-to-the-global-banking-system-is-slamming-shut-49bf5c53?mod=latest_headlines">[WSJ] Russia’s Backdoor to the Global Banking System Is Slamming Shut</a></p><p><a href="https://www.ft.com/content/67f51286-4e3f-465e-a780-2fe8ea0f4246">[FT] Bank of Japan ends era of negative interest rates</a></p><p><a href="https://www.ft.com/content/a27e3166-f2fb-432f-ae7c-eccbb216b7cf">[FT] The big test is yet to come for the Bank of Japan</a></p><p><a href="https://www.ft.com/content/d413fffb-77bd-4aa1-a02c-c07c7860fbc7">[FT] Central bankers see ‘immaculate disinflation’ within reach</a></p><p><a href="https://www.ft.com/content/57eb4fa4-16d5-43aa-bdee-2ffec736b31d">[FT] Calpers to invest more than $30bn in private markets</a></p>Doug Nolandhttp://www.blogger.com/profile/16205512922521957121noreply@blogger.comtag:blogger.com,1999:blog-8372678976953624833.post-82737369031673374222024-03-18T15:05:00.000-07:002024-03-18T21:24:10.531-07:00Monday Evening Links<p><a href="https://ca.finance.yahoo.com/news/asia-stocks-look-muted-ahead-222715125.html">[Yahoo/Bloomberg] ‘Magnificent Seven’ Power AI-Driven Stock Rebound: Markets Wrap</a></p><p><a href="https://ca.finance.yahoo.com/news/oil-holds-weekly-advance-more-231553764.html">[Yahoo/Bloomberg] Oil Extends Gain on Russia Refinery Attacks, China Economic Data</a></p><p><a href="https://ca.finance.yahoo.com/news/boj-end-yield-curve-control-180718591.html">[Yahoo/Bloomberg] BOJ to End Yield Curve Control, ETF Buying Tuesday, Nikkei Says</a></p><p><a href="https://www.reuters.com/markets/us/sticky-inflation-could-be-wild-card-easing-timetable-fed-meeting-2024-03-18/">[Reuters] Bond market sees inflation as a wild card for easing timetable at Fed meeting</a></p><p><a href="https://finance.yahoo.com/news/us-homebuilder-sentiment-increases-eight-140005056.html">[Yahoo/Bloomberg] US Homebuilder Sentiment Increases to an Eight-Month High</a></p><p><a href="https://www.reuters.com/business/energy/ceraweek-us-return-emergency-oil-reserve-prior-levels-by-year-end-2024-03-18/">[Reuters] US aims to return emergency oil reserve to prior levels by year-end</a></p><p><a href="https://www.reuters.com/markets/global-inflation-not-yet-defeated-bis-warns-2024-03-18/">[Reuters] Global inflation not yet defeated, BIS warns</a></p><p><a href="https://ca.finance.yahoo.com/news/morgan-stanley-warns-us-stocks-201615574.html">[Yahoo/Bloomberg] Morgan Stanley Warns US Stocks at Risk in ‘Dollar Regime Shift’</a></p><p><a href="https://ca.finance.yahoo.com/news/treasury-etf-hit-record-losing-201258737.html">[Yahoo/Bloomberg] Treasury ETF Hit by Record Losing Streak, $2 Billion of Outflows</a></p><p><a href="https://ca.finance.yahoo.com/news/ai-driving-us-electricity-growth-194252395.html">[Yahoo/Bloomberg] AI Driving US Electricity Growth Rate By 81%, NextEra Says</a></p><p><a href="https://www.reuters.com/world/europe/ukraine-says-putins-buffer-zone-comment-is-clear-sign-looming-escalation-2024-03-18/">[Reuters] Ukraine says Putin's buffer zone comment is a sign of escalation</a></p><p><a href="https://www.ft.com/content/f2395d2d-0af6-4380-a2a6-dd15da56235e">[FT] Hedge fund groups sue SEC to challenge Treasury dealer rule</a></p>Doug Nolandhttp://www.blogger.com/profile/16205512922521957121noreply@blogger.comtag:blogger.com,1999:blog-8372678976953624833.post-25158982314416085772024-03-18T05:12:00.000-07:002024-03-18T05:49:40.108-07:00Monday's News Links<p><a href="https://ca.finance.yahoo.com/news/asia-stocks-look-muted-ahead-222715125.html">[Yahoo/Bloomberg] Stocks Get an AI Tech Boost With Fed in Focus: Markets Wrap</a></p><p><a href="https://ca.finance.yahoo.com/news/oil-holds-weekly-advance-more-231553764.html">[Yahoo/Bloomberg] Oil Extends Gains on China Data, Attacks on Russian Refineries</a></p><p><a href="https://apnews.com/article/housing-starts-federal-reserve-existing-home-sales-868e2aee491f383ae5249e780282c7c0">[AP] This Week: Housing starts, Fed policy update and existing US home sales</a></p><p><a href="https://www.reuters.com/markets/us/sticky-inflation-could-be-wild-card-easing-timetable-fed-meeting-2024-03-18/">[Reuters] Sticky inflation could be a wild card for easing timetable at Fed meeting</a></p><p><a href="https://apnews.com/article/federal-reserve-inflation-prices-interest-rates-cuts-fe4b77c6b8901fb5d8b50e891dafbe34">[AP] Federal Reserve is likely to preach patience as consumers and markets look ahead to rate cuts</a></p><p><a href="https://ca.finance.yahoo.com/news/investors-are-about-to-find-out-whether-fed-still-expects-3-rate-cuts-in-2024-080006502.html">[Yahoo Finance] Investors are about to find out whether Fed still expects 3 rate cuts in 2024</a></p><p><a href="https://ca.finance.yahoo.com/news/fed-hikes-slash-household-net-110000741.html">[Yahoo/Bloomberg] Fed Hikes Slash Household Net Interest Income in Break From Past</a></p><p><a href="https://ca.finance.yahoo.com/news/equities-rally-risk-yields-morgan-082242320.html">[Yahoo/Bloomberg] Equities Rally at Risk From Yields, Morgan Stanley’s Wilson Says</a></p><p><a href="https://www.reuters.com/business/finance/hedge-flow-hedge-funds-buy-largest-bulk-bank-stocks-year-goldman-says-2024-03-18/">[Reuters] Hedge funds buy largest bulk of bank stocks in a year, Goldman says</a></p><p><a href="https://www.reuters.com/world/blinken-says-authoritarian-regimes-using-tech-undermine-democracy-2024-03-18/">[Reuters] Blinken says authoritarian regimes using tech to undermine democracy</a></p><p><a href="https://ca.finance.yahoo.com/news/boj-ueda-faces-decision-time-233044510.html">[Yahoo/Bloomberg] BOJ Rate Hike on Tuesday Is Now Widely Expected After Wages Jump</a></p><p><a href="https://ca.finance.yahoo.com/news/china-growth-beats-estimates-production-020102261.html">[Yahoo/Bloomberg] China’s Growth Mixed as Output Jumps, Consumption Lags</a></p><p><a href="https://www.reuters.com/markets/asia/china-jan-feb-industrial-output-retail-sales-beat-expectations-2024-03-18/">[Reuters] China's upbeat industrial output, retail sales tempered by frail property</a></p><p><a href="https://www.reuters.com/world/asia-pacific/chinas-jan-feb-property-investment-falls-90-yy-2024-03-18/">[Reuters] China's Jan-Feb property investment declines narrow</a></p><p><a href="https://ca.finance.yahoo.com/news/adani-dollar-bonds-fall-most-025853069.html">[Yahoo/Bloomberg] Adani Bonds, Shares Decline as US Expands Probe Into the Group</a></p><p><a href="https://ca.finance.yahoo.com/news/global-commodity-trading-profits-topped-060923743.html">[Yahoo/Bloomberg] Global Commodity Trading Profits Topped $100 Billion for Second-Best Year Ever</a></p><p><a href="https://www.reuters.com/world/europe/kremlin-says-only-way-protect-russia-is-create-buffer-zone-with-ukraine-2024-03-18/">[Reuters] Kremlin says the only way to protect Russia is to create a buffer zone with Ukraine</a></p><p><a href="https://www.bloomberg.com/news/articles/2024-03-17/rates-in-2024-markets-react-as-powell-s-fed-stays-course?srnd=markets-vp&sref=eo0IIyEe">[Bloomberg] Powell’s Silence Frustrates Markets as Post-Covid Economy Shifts</a></p><p><a href="https://www.bloomberg.com/news/articles/2024-03-18/decoding-xi-s-new-catchphrase-aimed-at-reviving-china-s-economy?srnd=markets-vp&sref=eo0IIyEe">[Bloomberg] Decoding Xi’s New Catchphrase Aimed at Reviving China’s Economy</a></p><p><a href="https://www.wsj.com/finance/currencies/the-end-of-japans-negative-rates-will-be-a-slow-moving-tsunami-3dd41964?mod=latest_headlines">[WSJ] The End of Japan’s Negative Rates Will Be a Slow-Moving Tsunami</a></p><p><a href="https://www.wsj.com/world/china/china-unemployment-job-market-63dca8ad?mod=latest_headlines">[WSJ] China’s Economy Has a New Problem: Its Job Market</a></p><p><a href="https://www.wsj.com/finance/commodities-futures/gold-miners-enjoying-record-prices-are-wary-of-hedging-their-bets-51eaca2f?mod=latest_headlines">[WSJ] Gold Miners, Enjoying Record Prices, Are Wary of Hedging Their Bets</a></p><p><a href="https://www.ft.com/content/9d58ff6a-c6c4-4740-b3aa-5699a865c7f4">[FT] Fed will have to keep rates high for longer than markets anticipate, say economists</a></p><p><a href="https://www.ft.com/content/a5309d00-ba08-4948-ab61-1f1187cbf030">[FT] Central bankers take centre stage</a></p><p><a href="https://www.ft.com/content/96eba68d-4b55-427d-9737-78fcca5ff894">[FT] Vladimir Putin’s ominous fifth term</a></p>Doug Nolandhttp://www.blogger.com/profile/16205512922521957121noreply@blogger.comtag:blogger.com,1999:blog-8372678976953624833.post-53825103776894282512024-03-17T16:55:00.000-07:002024-03-17T17:07:03.375-07:00Sunday Evening Links<p><a href="https://www.cnbc.com/2024/03/17/stock-futures-are-little-changed-as-investors-await-fresh-fed-guidance-live-updates.html">[CNBC] Stock futures are little changed as investors await fresh Fed guidance: Live updates</a></p><p><a href="https://ca.finance.yahoo.com/news/asia-stocks-look-muted-ahead-222715125.html">[Yahoo/Bloomberg] Asia Stocks Look Mixed Ahead of Central Bank Blitz: Markets Wrap</a></p><p><a href="https://ca.finance.yahoo.com/news/oil-holds-weekly-advance-more-231553764.html">[Yahoo/Bloomberg] Oil Holds Weekly Advance After More Russian Refineries Attacked</a></p><p><a href="https://ca.finance.yahoo.com/news/japan-ceos-see-higher-prices-203000037.html">[Yahoo/Bloomberg] Japan CEOs See Higher Prices, Wages With BOJ Move ‘Just a Matter of Time’</a></p><p><a href="https://ca.finance.yahoo.com/news/goldman-now-sees-boj-scrapping-230742847.html">[Yahoo/Bloomberg] Goldman Now Sees BOJ Scrapping Negative Interest Rate Tuesday</a></p><p><a href="https://www.reuters.com/world/europe/putin-warns-west-russia-nato-conflict-is-just-one-step-ww3-2024-03-17/">[Reuters] Putin warns the West a Russia-NATO conflict is just one step from World War Three</a></p><p><a href="https://ca.finance.yahoo.com/news/putin-warns-russia-won-t-222959852.html">[Yahoo/Bloomberg] Putin Warns Russia Won’t Be Stopped After Record Election Win</a></p><p><a href="https://www.reuters.com/world/europe/ukrainian-drones-have-hit-12-russian-oil-refineries-kyiv-source-says-2024-03-17/">[Reuters] Ukrainian drones have hit 12 Russian oil refineries, Kyiv source says</a></p><p><a href="https://www.bloomberg.com/news/articles/2024-03-17/ueda-faces-decision-time-on-rate-hike-as-wage-momentum-picks-up?srnd=homepage-americas&sref=eo0IIyEe">[Bloomberg] BOJ’s Ueda Faces Decision Time on Rate Hike</a></p>Doug Nolandhttp://www.blogger.com/profile/16205512922521957121noreply@blogger.comtag:blogger.com,1999:blog-8372678976953624833.post-45368863398607815742024-03-17T07:28:00.000-07:002024-03-17T07:41:45.008-07:00Sunday's News Links<p><a href="https://ca.finance.yahoo.com/news/fed-boj-dominate-rate-week-200000760.html">[Yahoo/Bloomberg] Fed, BOJ to Lead a Week of Rate Decisions for Half the World </a></p><p><a href="https://ca.finance.yahoo.com/news/all-eyes-on-the-federal-reserve-what-to-know-this-week-130040499.html">[Yahoo Finance] All eyes on the Federal Reserve: What to know this week</a></p><p><a href="https://ca.finance.yahoo.com/news/everything-rally-comes-derivatives-market-181515991.html">[Yahoo/Bloomberg] The Everything Rally Comes to Derivatives Market</a></p><p><a href="https://www.reuters.com/world/europe/ukraine-drone-attacks-spark-fire-krasnodar-refinery-russia-says-2024-03-17/">[Reuters] Ukrainian drones attack refinery, target Moscow, disrupt power, Russia says</a></p><p><a href="https://www.wsj.com/economy/the-feds-challenge-has-it-hit-the-brakes-hard-enough-a7760be6?mod=latest_headlines">[WSJ] The Fed’s Challenge: Has It Hit the Brakes Hard Enough?</a></p><p><a href="https://www.wsj.com/real-estate/commercial/americas-office-fire-sale-has-barely-begun-0c8d376f?mod=latest_headlines">[WSJ] America’s Office Fire Sale Has Barely Begun</a></p><p><a href="https://www.wsj.com/world/russia/what-another-six-years-of-putin-may-bring-for-russia-and-the-world-d044d47b?mod=latest_headlines">[WSJ] What Another Six Years of Putin May Bring for Russia and the World</a></p><p><a href="https://www.ft.com/content/a43b9acd-d203-415a-9e8c-38dae65eebde">[FT] Will the Bank of Japan finally raise interest rates?</a></p><p><a href="https://www.ft.com/content/d1b74e8a-f8f4-4092-af9a-46bcb73a099e">[FT] Climate graphic of the week: Oceans set heat records for more than 365 days in a row</a></p>Doug Nolandhttp://www.blogger.com/profile/16205512922521957121noreply@blogger.comtag:blogger.com,1999:blog-8372678976953624833.post-64350099540625048362024-03-16T07:49:00.000-07:002024-03-16T08:00:41.561-07:00Saturday's News Links<p><a href="https://ca.finance.yahoo.com/news/charting-global-economy-stubborn-inflation-090000371.html">[Yahoo/Bloomberg] Charting the Global Economy: Stubborn Inflation Giving Fed Pause </a></p><p><a href="https://ca.finance.yahoo.com/news/tiktok-troubles-green-saturday-us-141454776.html">[Yahoo/Bloomberg] TikTok Troubles, Get Your Green On: Saturday US Briefing</a></p><p><a href="https://ca.finance.yahoo.com/news/why-auto-insurance-costs-are-rising-at-the-fastest-rate-in-47-years-130004238.html">[Yahoo Finance] Why auto insurance costs are rising at the fastest rate in 47 years</a></p><p><a href="https://ca.finance.yahoo.com/news/gold-beans-rage-china-gen-000000851.html">[Yahoo/Bloomberg] Gold Beans All the Rage With China’s Gen Z as Deflation Bites</a></p><p><a href="https://www.cnbc.com/2024/03/15/laid-off-techies-struggle-to-find-jobs-with-cuts-at-highest-since-2001.html">[CNBC] Laid-off techies face ‘sense of impending doom’ with job cuts at highest since dot-com crash</a></p><p><a href="https://www.reuters.com/world/europe/ukraine-strikes-russian-city-refinery-day-two-presidential-vote-2024-03-16/">[Reuters] Ukraine hits Russian city and oil refinery on day two of presidential vote</a></p><p><a href="https://apnews.com/article/alexei-navalny-death-russia-election-putin-40664ca31977c8804fc4149e45093439">[AP] With Navalny dead, his allies keep fighting to undermine Putin’s grip on power</a></p><p><a href="https://www.reuters.com/world/asia-pacific/turn-around-immediately-taiwan-warns-off-chinese-coast-guard-boats-again-2024-03-16/">[Reuters] 'Turn around immediately': Taiwan warns off Chinese coast guard boats again as tensions simmer</a></p><p><a href="https://www.bloomberg.com/news/articles/2024-03-16/ceraweek-s-yergin-on-what-to-expect-at-big-energy-conference?srnd=homepage-americas&sref=eo0IIyEe">[Bloomberg] Dan Yergin Is Concerned About AI-Fueled Boom in Electricity Use</a></p><p><a href="https://www.wsj.com/economy/central-banking/suspense-builds-for-fed-as-growth-downshifts-and-inflation-lingers-109b4c3d?mod=latest_headlines">[WSJ] Suspense Builds for Fed as Growth Downshifts and Inflation Lingers</a></p><p><a href="https://www.ft.com/content/e7513369-7537-4ce9-b2ce-5c787cb01b32">[FT] Markets capitulate to Federal Reserve on interest rates after months-long stand-off</a></p><p><a href="https://www.ft.com/content/05933a27-a461-4001-a3dd-43441c623495">[FT] Bond vigilantes snooze as Treasury market shrugs off vast US borrowing</a></p><p><a href="https://www.ft.com/content/3603b4d2-ce38-4d2c-a21b-baae6ea1921e">[FT] The battle over TikTok</a></p><p><a href="https://www.ft.com/content/121ee349-e20b-4f15-a41a-a1a4d7564bb0">[FT] ‘Stretched’ US consumers start to pull back on spending</a></p><p><a href="https://www.ft.com/content/7314c9c3-318e-4ed2-935b-1dbfcbe95860">[FT] Record low US options skew shows investor confidence on stock market rally</a></p>Doug Nolandhttp://www.blogger.com/profile/16205512922521957121noreply@blogger.comtag:blogger.com,1999:blog-8372678976953624833.post-88009010714324842492024-03-16T00:06:00.000-07:002024-03-16T21:52:23.273-07:00Weekly Commentary: FailedI often find my thoughts returning to the great German economist, Dr. Kurt Richebacher. This week, it was his analysis that inflation comes in various forms, with his argument that asset inflation was the most pernicious. It was such a minority view, seemingly unique. As he would explain, consumer price inflation is commonly recognized as destructive. Rising consumer prices will invariably upset the public, business community, politicians, and central bankers. Sure enough, there was overwhelming support for the Fed’s effort to rein in consumer price pressures.<br /><br />Meanwhile, asset inflation is universally relished, viewed generally as validation of sound underlying fundamentals. There is no anti-asset inflation constituency to exert influence over policy. Especially these days, there is nothing to suggest the Fed would adopt tighter monetary policy to thwart assets inflation, speculation, and Bubbles. Indeed, at this late cycle stage, it’s assumed that supporting rising market prices is a primary responsibility of the Federal Reserve and global central bank community.<br /><br />History teaches that the greatest crises unfold after the bursting of major asset and speculative Bubbles. The bursting mortgage finance Bubble and “great financial crisis” are not yet distant history. Even greater Credit and financial excess - and resulting deep structural maladjustment - were responsible for the Great Depression.<br /><br />Another historic asset Bubble calamity is top of mind. The Bank of Japan (BOJ) meets next Tuesday. The market has a 56% probability of the BOJ boosting rates above zero, effectively ending the negative rate experiment with the first rate increase since 2007. <br /><br />Japan’s deep structural issues can be traced directly back to the nation’s spectacular eighties asset Bubble. As is typically the case, Japanese asset inflation and speculative Bubbles unfolded in a low policy rate environment, with tame consumer price inflation having deluded central bankers into a false sense of prowess and control.<br /><br />After twenty years of post-Bubble stagnation, the BOJ in 2013, under the leadership of Governor Haruhiko Kuroda (and Ben Bernanke prodding), adopted an experimental policy course of radical inflationism. Having ended 2012 at 158 TN yen, Bank of Japan assets inflated 379% to 759 TN yen, or $5.162 TN. If negative rates weren’t enough, the Kuroda BOJ also imposed a yield curve control (YCC) regime that pegged government bond yields to near zero percent. <br /><br /><i>March 15 – Bloomberg (Erica Yokoyama and Yoshiaki Nohara): “Japan’s largest union group announced stronger-than-expected annual wage deals Friday, a result that will fuel already intense speculation that the central bank will next week raise interest rates for the first time since 2007. Rengo, a federation of unions, said its members have so far secured deals averaging 5.28%, a figure that far outpaces the initial 3.8% tally from a year ago — itself the biggest in 30 years. Many of Rengo’s affiliated groups had already announced agreements to hike wages by 5% or more.”</i><br /><br />With 5% wage boost labor contracts and a yen near lows back to 1990, I guess Governor Kazuo Ueda can soon declare mission accomplished. Meanwhile, the Nikkei 225 Index has inflated about 50% since the end of 2022, trading to record highs for the first time since Bubble year 1989. Reminiscent of the late eighties, spectacular Tokyo condo price inflation has made housing unaffordable for most. The IIF places Japanese government debt at 230% of GDP. <br /><br />It should be incontrovertible that central banks must remain conservative and principled institutions. Too much is at stake to ever play fast and loose. Major policy errors are not only destructive, they predictably lead to only more momentous blunders. Drifts or shifts into experimental and radical policymaking signal something has gone wrong. I’ve always had issues with the likes of Bernanke, Draghi, and Kuroda. They never seemed interested in exploring the root causes behind the bursting Bubbles that provoked their radical monetary inflationism. <br /><br />Today, at manic peak Bubble bullishness, most everyone (if they were familiar with my analysis) would see my efforts as a comical fool’s errand. Lunatic fringe fear-mongering. Yet I remain convinced that inflationism is the fool’s errand. The inflation of non-productive “money” and Credit is definitely the problem, not the solution. Zero and negative rates, Trillions of “money printing,” and epic market manipulation only inflated history’s greatest Bubbles - while exacerbating epic global structural maladjustment. The scope of China’s policy failures is coming into clearer focus. The failure of BOJ’s foray into radical inflationism will be revealed as Japan begins a process of normalization fraught with peril.<br /><br />Federal Reserve policymaking is these days celebrated as pure brilliance. They’ve reined in inflation, while asset prices have continued to rise. Stocks have surged to record highs, home price inflation has been ongoing, and corporate bond returns have been solid. The Fed has accomplished monetary tightening without imposing costs on labor or the economy. If it seems too good to be true…<br /><br />The Fed has failed. This dreadful reality is masked by a facade forged from loose conditions, asset inflation, and speculative Bubbles. And this sounds so lunatic fringe for a simple reason: I don’t share today’s universal adoration for loose financial conditions. <br /><br />Recalling William McChesney Martin’s great insight: “It’s the job of the Federal Reserve to take the punch bowl away before the party gets going.” There is profound wisdom in this witty quote, one whose resonance has diminished over the decades of central bank largesse. Get control early or face debilitating societal consequences. <br /><br />To assert Fed failure today is to beckon for lunatic designation. But I’ve seen it all before. Mark my words: After the Bubble bursts, it will have been apparent to all. <br /><br />The Fed has Failed thesis can be boiled down to a few key points. Our markets, financial system, and economy have been at extraordinary risk, acutely susceptible to late-cycle Credit excess, asset inflation, and extreme speculation. Yet the Fed is negligently impotent. Instead of “leaning against the wind” with tighter monetary policy, the Federal Reserve signaled a “dovish pivot” to rate cuts with highly speculative markets in the throes of blowoff excess.<br /><br />In short, the Fed is today incapable of tightening financial conditions in an environment where tighter conditions are fundamental to monetary stability, sound assets markets, and stable price levels across the economy. And I am familiar with the arguments against tightening: it would further boost debt service costs and federal debt, harm market function, hit over-levered households and businesses, and unleash recessionary forces. <br /><br />I certainly appreciate today’s late-cycle fragilities. Yet they are the inevitable consequence of years of monetary mismanagement. Perpetual loose conditions progressively subverted market discipline. Only the bond market could have forced a semblance of fiscal prudence out of Washington. Instead, years of artificially low rates and massive QE programs accommodated a drift toward reckless deficit spending. Despite booming markets and solid economic growth, intractable Washington profligacy will ensure a 2024 fiscal deficit of around 7% of GDP. <br /><br />Tighter conditions would be problematic for highly levered bond markets. It would be painful for government, business, and household sectors. It would force much needed and inevitable deleveraging, in highly speculative markets and throughout the real economy. Unfortunately, pain would be inflicted upon over-levered speculators, business enterprises, and households. <br /><br />A regretful amount of pain is the comeuppance for years of central bank subversion of market forces. Importantly, thwarting adjustment in a capitalistic system ensures greater future pain. As Dr. Richebacher used to say: there is no cure for a Bubble, only not to let it inflate. Years of accommodating and resuscitating Bubble excess got us to where we are today: a Fed that completely disavows responsibility for containing financial excess and Bubbles. <br /><br />When I ponder the essence of the Fed’s failure, my thoughts return to analysis of the success of gold standard monetary regimes. An environment of relative stability was not simply the fruit of pegging the money supply to a somewhat fixed quantity of gold. Policy makers, bankers and industrialists were both committed to the system and understood that prudent behavior was fundamental to its sustainability. <br /><br />Importantly, financial operators and speculators understood that policymakers would respond to fledgling excess with the resolve necessary to safeguard the stability of the monetary regime. This mindset and value system worked to restrain the self-reinforcing dynamics inherent to Credit and speculative excess. When things began to get overheated, players showed restraint with the knowledge that policymakers were prepared to impose painful tightening measures. The gold standard system had inherent mechanisms that disincentivized pro-Bubble behavior. <br /><br />The contemporary central bank policy regime failed specifically because it incentivized myriad excesses. There is only upside for Washington politicians to spend lavishly and run up massive deficits. Businesses and households borrow irresponsibly, knowing that the Fed will ensure that the economy quickly recovers from any shock or downturn. Bankers and lenders lend aggressively, knowing the Fed (and GSEs) have their backs. Households speculate in stocks and options, confident that the Fed backstop ensures ever higher equities prices. <div><br /></div><div>Importantly, the enterprising leveraged speculating community pushes the envelope with leverage and risk-taking, enticed by incredible fortunes for the taking - and confident that the greater the degree of excess (and resulting fragility), the more zealously the Fed (and central bank community) will ensure liquid and inflating markets. In short, self-reinforcing Credit and speculative excess are powerfully incentivized, ensuring ever deeper financial and economic structural maladjustment. <br /><br />It's a monetary regime doomed to fail. That policymakers resorted over the years to zero/negative rates, Trillions of “printing,” and egregious market interventions is at the heart of why my world view diverges so diametrically from others. <br /><br />Two-year yields jumped 25 basis points this week. The market closed Friday pricing a 4.61% policy rate at the Fed’s December 18th meeting, up 23 bps on the week. This implies almost three rate cuts (72bps) by year-end, with the market now seeing only a 61% probability of a reduction by the June 12th FOMC meeting.<br /><br />Basically, the market is aligned with the median three cuts signaled by the December “dot plot.” A new “Summary of Economic Projections” will be forthcoming Wednesday. And it’s becoming a habit. This week saw CPI and PPI reports with higher-than-expected inflation. One might expect some FOMC members to adjust inflation and growth expectations higher, while reducing the number of projected 2024 cuts. <br /><br /><i>March 11 – Reuters (Lewis Jackson and Stella Qiu): “JPMorgan… CEO Jamie Dimon… urged the Federal Reserve to wait until after June before cutting interest rates, arguing the central bank needs to shore up its inflation-fighting credibility. ‘I think they have to be data-dependent. If I were them, I would wait,’ Dimon said… ‘You can always cut it quickly and dramatically. Their credibility is a little bit at stake here. I would even wait past June and let it all sort it out.’ Dimon said the U.S. economy was doing so well it could almost be characterised as a boom, but cautioned against the wholesale embrace of the soft landing narrative by markets… Dimon said the surge in debt and equity markets since late 2023 had some bubble-like characteristics and linked it in part to the legacy of the pandemic-era fiscal and monetary stimulus, which was ‘still in the system, you can’t say that they’re gone’.”</i><br /><br /><i>March 12 – Bloomberg (Katherine Doherty): “Citadel founder Ken Griffin said the Federal Reserve should move slowly in lowering interest rates to avoid the possibility of having to reverse course later. ‘Pausing and then changing direction back toward higher rates quickly, that would, in my opinion, be the most devastating course of action to pursue,’ Griffin said… at the Futures Industry Association conference... ‘So I think they’re going to be a bit slower than people were expecting.’”</i><br /><br />We’ll pay close attention to Jamie Dimon and Ken Griffin. They are two of this extraordinary era’s preeminent financial operators, successfully performing their financial alchemy from the most advantageous of catbird seats. I suspect they’re concerned that things could become unhinged with rate cuts. The Fed’s credibility is at stake. <br /><br />Powell’s press conference should be interesting. It would be appropriate for “Balanced Powell” to rectify his recent dovish lean. Stocks and bonds appear increasingly vulnerable. The holes in the bullish narrative are increasingly difficult to deny. Curious to see commodities start to perk up. And didn’t Nasdaq trade to highs around the March 2000 quarterly options expiration, a record high that held for 15 years. <br /><br /><br /><div><span style="font-size: large;">For the Week:</span><br /><br />The S&P500 (up 7.3% y-t-d) and Dow (up 2.7%) were little changed. The Utilities declined 0.4% (down 0.1%). The Banks fell 1.2% (up 2.1%), while the Broker/Dealers added 0.5% (up 6.1%). The Transports fell 1.4% (down 2.5%). The S&P 400 Midcaps retreated 1.0% (up 5.1%), and the small cap Russell 2000 dropped 2.1% (up 0.6%). The Nasdaq100 lost 1.2% (up 5.8%). The Semiconductors sank 4.0% (up 13.9%). The Biotechs dropped 2.3% (down 3.9%). While bullion retreated $23, the HUI gold index advanced 1.8% (down 4.4%).<br /><br />Three-month Treasury bill rates ended the week at 5.22%. Two-year government yields jumped 25 bps this week to 4.73% (up 48bps y-t-d). Five-year T-note yields surged 28 bps to 4.33% (up 48bps). Ten-year Treasury yields rose 23 bps to 4.31% (up 43bps). Long bond yields jumped 18 bps to 4.43% (up 40bps). Benchmark Fannie Mae MBS yields surged 32 bps to 5.82% (up 55bps).<br /><br />Italian yields gained 12 bps to 3.70% (unchanged y-t-d). Greek 10-year yields rose 15 bps to 3.42% (up 37bps). Spain's 10-year yields jumped 16 bps to 3.24% (up 25bps). German bund yields surged 18 bps to 2.44% (up 42bps). French yields gained 16 bps to 2.88% (up 32bps). The French to German 10-year bond spread narrowed two to 44 bps. U.K. 10-year gilt yields jumped 13 bps to 4.10% (up 57bps). U.K.'s FTSE equities index gained 0.9% (down 0.1% y-t-d).<br /><br />Japan's Nikkei Equities Index dropped 2.5% (up 15.7% y-t-d). Japanese 10-year "JGB" yields gained five bps to 0.79% (up 14bps y-t-d). France's CAC40 rose 1.7% (up 8.2%). The German DAX equities index increased 0.7% (up 7.1%). Spain's IBEX 35 equities index surged 2.8% (up 4.9%). Italy's FTSE MIB index added 1.6% (up 11.8%). EM equities were mixed. Brazil's Bovespa index slipped 0.4% (down 5.6%), while Mexico's Bolsa index rallied 2.2% (down 2.2%). South Korea's Kospi index declined 0.5% (up 0.4%). India's Sensex equities index slumped 2.0% (up 0.6%). China's Shanghai Exchange Index increased 0.3% (up 2.7%). Turkey's Borsa Istanbul National 100 index sank 3.6% (up 18.2%). Russia's MICEX equities index dipped 0.5% (up 6.5%).<br /><br />Federal Reserve Credit increased $4.5bn last week to $7.505 TN. Fed Credit was down $1.384 TN from the June 22nd, 2022, peak. Over the past 235 weeks, Fed Credit expanded $3.779 TN, or 101%. Fed Credit inflated $4.695 TN, or 167%, over the past 592 weeks. Elsewhere, Fed holdings for foreign owners of Treasury, Agency Debt increased $3.8bn last week to $3.348 TN. "Custody holdings" were down $14.4 billion y-o-y, or 0.4%.<br /><br />Total money market fund assets jumped $31.3bn to a record $6.108 TN. Money funds were up $1.215 TN, or 24.8%, y-o-y.<br /><br />Total Commercial Paper surged $27.0bn to a 13-month high $1.293 TN. CP was up $130bn, or 11.2%, over the past year.<br /><br />Freddie Mac 30-year fixed mortgage rates dropped 16 bps to 6.74% (up 23bps y-o-y). Fifteen-year rates declined six bps to 6.16% (up 31bps). Bankrate's survey of jumbo mortgage borrowing costs had 30-year fixed rates down nine bps to a six-week low 7.10% (up 14bps).<br /><br /><span style="font-size: large;">Currency Watch:</span><br /><br />For the week, the U.S. Dollar Index recovered 0.7% to 103.43 (up 2.1% y-t-d). For the week on the upside, the Mexican peso increased 0.6%. On the downside, the Norwegian krone declined 1.8%, the New Zealand dollar 1.5%, the Swedish krona 1.5%, the Japanese yen 1.3%, the Australian dollar 1.0%, the British pound 1.0%, the South Korean won 0.8%, the Swiss franc 0.8%, the Singapore dollar 0.5%, the euro 0.5%, the Canadian dollar 0.4%, the Brazilian real 0.3%, and the South African rand 0.2%. The Chinese (onshore) renminbi slipped 0.08% versus the dollar (down 1.35% y-t-d).<br /><br /><span style="font-size: large;">Commodities Watch:</span><br /><br />March 14 – Bloomberg (Grant Smith): “Global oil markets face a supply deficit throughout 2024, instead of the surplus previously expected, assuming that OPEC+ continues output cuts in the second half of the year, according to the International Energy Agency. Saudi Arabia and its partners agreed earlier this month to prolong roughly 2 million barrels day of production curbs to the middle of the year. The IEA assumes the measures will in fact continue until the end of 2024, reflecting the ‘bloc’s efforts to balance oil markets,’ it said…”<br /><br />The Bloomberg Commodities Index gained 1.2% (up 0.6% y-t-d). Spot Gold dipped 1.1% to $2,156 (up 4.5%). Silver surged 3.6% to $25.19 (up 5.8%). WTI crude jumped $3.03, or 3.9%, to $81.04 (up 13%). Gasoline surged 7.7% (up 29%), while Natural Gas dropped 8.3% to $1.66 (down 34%). Copper surged 6.0% (up 6.0%). Wheat increased 0.3% (down 16%), and Corn recovered 2.5% (down 7%). Bitcoin gained $1,040, or 1.5%, to $69,600 (up 63.7%).<br /><br /><span style="font-size: large;">Middle East War Watch:</span><br /><br />March 12 – Wall Street Journal (Sune Engel Rasmussen and Adam Chamseddine): “Hostilities flared between Israel and the Lebanese Hezbollah militia, threatening to broaden Israel’s war to its northern border amid an impasse in negotiations to reach a cease-fire in Gaza. Hezbollah launched about 100 Katyusha rockets at northern Israel on Tuesday, the heaviest barrage since Israel’s war in Gaza against Hamas… began five months ago. Hezbollah said its rockets were a response to an Israeli airstrike Monday night in Baalbek in northeastern Lebanon. Israel retaliated later Tuesday with more strikes against two Hezbollah military command centers and weapons depots, also in Baalbek… Israel said the Monday strike in Baalbek was retaliation for drones dispatched to the Golan Heights.”<br /><br />March 11 – Reuters (Mohammed Ghobari): “Airstrikes attributed to a U.S.-British coalition hit port cities and small towns in western Yemen on Monday, killing at least 11 people and injuring 14 while defending commercial shipping, a spokesperson for Yemen's internationally recognized government told Reuters. At least 17 airstrikes were reported in the country, including in the principal port city of Hodeidah and at Ras Issa Port…”<br /><br />March 10 – Wall Street Journal (Costas Paris): “More than 50 ships queued to cross the Panama Canal on a recent day—from tankers hauling propane to cargo ships packed with food. A prolonged drought has led the canal’s operator to cut the number of crossings, resulting in longer waits. The tolls that ships pay are now around eight times more expensive than normal. Over 7,000 miles away, vessels that move containers through Egypt’s Suez Canal are waiting for naval escorts or avoiding the passage altogether to take a much longer voyage around South Africa… The Suez’s problems are geopolitical and those in Panama are climate-based, but both are roiling global trade. Cargo volumes through the Suez and Panama canals have plunged by more than a third. Hundreds of vessels have diverted to longer routes, resulting in delivery delays, higher transportation costs and economic wreckage for local communities.”<br /><br /><span style="font-size: large;">Ukraine War Watch:</span><br /><br />March 12 – Reuters (Guy Faulconbridge and Lidia Kelly): “Ukraine pounded targets in Russia on Tuesday with dozens of drones and rockets in an attack that inflicted serious damage on a major oil refinery and sought to pierce the land borders of the world's biggest nuclear power with armed proxies. Russia and Ukraine have both used drones to strike critical infrastructure, military installations and troop concentrations in their more than two-year war, with Kyiv hitting Russian refineries and energy facilities in recent months.”<br /><br />March 13 – Bloomberg: “Ukrainian drone attacks halted three oil refineries deep within Russian territory in an assault President Vladimir Putin said was aimed at disrupting his presidential election later this week. An aerial strike on Wednesday caused a blaze at one of the country’s biggest crude-processing facilities, Rosneft PJSC’s Ryazan plant near Moscow. The smaller Novoshakhtinsk refinery in the southern Rostov region was also halted by a drone attack…”<br /><br /><span style="font-size: large;">Taiwan Watch:</span><br /><br />March 10 – Reuters (Yimou Lee and Fabian Hamacher): “Taiwan's top security official told parliament… that China runs ‘joint combat readiness patrols’ near the democratic island every 7-10 days on average, saying Chinese forces were trying to ‘normalise’ drills near Taiwan. China has in recent years stepped up military activities near Taiwan, with almost daily incursions into the island's air defence identification zones and regular ‘combat readiness patrols’ that included drills by its air and naval forces.”<br /><br /><span style="font-size: large;">Market Instability Watch:</span><br /><br />March 11 – New York Times (Angel Ubide): “Issues such as climate change, energy independence and national security plans are piling up for investors — and no one is certain where the pieces will fall. Before the global financial crisis of 2008, the economic policy framework was largely more transparent and predictable: manage demand by stabilising inflation while controlling public debt. It required fewer policy instruments and benefited from expanding globalisation and growing capital flows… But faced with a plethora of monetary, fiscal, regulatory, trade and industrial policies, that framework is now under pressure and it is on a collision course with the forces of rising nationalism and regionalised interests. As Mario Draghi warned during a speech in February, the disjointed policies emerging as a result could have unexpected and dire consequences.”<br /><br />March 11 – Bloomberg (Lu Wang and Justina Lee): “Forget the artificial-intelligence frenzy — the most-exciting trade on Wall Street right now might just be betting on boring. As winners of the AI boom like Nvidia Corp. power benchmark stock gauges to record after record, a less remarked-upon phenomenon has been unfolding at the heart of the US market: Investors are sinking vast sums into strategies whose performance hinges on enduring equity calm. Known as short-volatility bets, they were a key factor in the stock plunge of early 2018 when they wiped out in epic fashion. Now they’re back in a different guise — and at a much, much bigger scale. Their new form largely takes the shape of ETFs that sell options on stocks or indexes in order to juice returns. Assets in such products have almost quadrupled in two years to a record $64 billion, data compiled by Global X ETFs show. Their 2018 short-vol counterparts — a small group of funds making direct bets on expected volatility — had only about $2.1 billion before they imploded.”<br /><br /><span style="font-size: large;">Bank Watch:</span><br /><br />March 10 – New York Times (Rob Copeland): “A year ago, the government and America’s largest banks joined forces in a rare moment of comity. They were forced into action after Silicon Valley Bank collapsed on March 10, 2023, quickly followed by two other lenders, Signature Bank and First Republic. Faced with the threat of a billowing crisis that could threaten the banking industry — the worst one since 2008 — rivals and regulators put together a huge bailout fund… The biggest banks emerged from the period even larger, after picking up accounts from their smaller rivals. But they have also grown more confident in challenging regulators on what went wrong and what to do to prevent future crises. Indeed, many bankers and their lobbyists now rush to describe the period as a regional banking crisis, a term that tends to understate how worried the industry was at the time.”<br /><br /><span style="font-size: large;">Global Credit Bubble Watch:</span><br /><br />March 13 – Bloomberg (Tasos Vossos): “Less than a year ago, investors were gaming out what would happen when billions of dollars of bonds reached maturity dates, leaving borrowers potentially crushed by costly refinancings. Now, those fears are fizzling away, with companies rushing to sell debt to a buoyant market. The implied cost of refinancing junk-rated bonds is now at its lowest since May 2022… For investment-grade firms, it’s the cheapest since the summer of 2022… Those falling costs have spurred a wave of corporate bond sales and, in turn, pushed back the so-called maturity wall of debt coming due. The turnaround has come as rate cuts are built into forecasts for the summer, lowering underlying borrowing costs and creating a risk-on mood among investors… And companies are seizing on the ebullience while it lasts, with the new supply of corporate bonds globally now running almost 30% ahead of last year…”<br /><br />March 14 – Financial Times (George Steer and Harriet Clarfelt): “More companies have defaulted on their debt in 2024 than in any start to the year since the global financial crisis as inflationary pressures and high interest rates continue to weigh on the world’s riskiest borrowers, according to S&P Global Ratings. This year’s global tally of corporate defaults stands at 29, the highest year-to-date count since the 36 recorded during the same period in 2009... Subdued consumer demand, rising wages and high interest rates… had all contributed to the increase in the number of companies struggling to repay their debt, S&P said.”<br /><br />March 14 – Wall Street Journal (Matt Wirz): “Private fund managers such as Apollo, Ares, Blackstone and KKR have grown to dominate corporate finance over the past decade. Now they are targeting the biggest prize in the global economy: the U.S. consumer. The firms are pushing aggressively into ‘asset-based finance,’ a kitchen sink of debt including auto loans, credit cards, real-estate mortgages and loans backed by equipment... If asset-based finance by private funds grows as quickly as corporate lending did, consumer, equipment and specialty lending by private funds could rise to $900 billion in the next few years from $350 billion currently, according to research by Atalaya Capital Management. The estimate doesn’t include residential and commercial mortgages, which many of the funds also buy.”<br /><br />March 14 – Financial Times (Harriet Clarfelt): “Borrowing costs for European companies have fallen to a two-year low against benchmark bonds… The average European investment-grade spread — the premium paid by companies to borrow over equivalent German government bond yields — has dropped from 1.36 percentage points to 1.15 percentage points this year, according to Ice BofA data.”<br /><br />March 12 – Reuters (Saeed Azhar): “Goldman Sachs Asset Management… aims to expand its private credit portfolio to $300 billion in five years from the current $130 billion, a senior executive said, laying out an aggressive expansion plan. ‘It's a huge opportunity,’ Marc Nachmann, Goldman’s global head of asset and wealth management, told Reuters… Goldman's private credit aspirations are larger than those of its peers, including Morgan Stanley, which aims to double its private credit portfolio to $50 billion in the medium term as it gathers funds from large investors.”<br /><br /><span style="font-size: large;">AI Bubble Watch:</span><br /><br />March 13 – Associated Press (Kelvin Chan): “European Union lawmakers gave final approval to the 27-nation bloc’s artificial intelligence law Wednesday, putting the world-leading rules on track to take effect later this year. Lawmakers in the European Parliament voted overwhelmingly in favor of the Artificial Intelligence Act, five years after regulations were first proposed. The AI Act is expected to act as a global signpost for other governments grappling with how to regulate the fast-developing technology. ‘The AI Act has nudged the future of AI in a human-centric direction, in a direction where humans are in control of the technology and where it — the technology — helps us leverage new discoveries, economic growth, societal progress and unlock human potential,’ Dragos Tudorache, a Romanian lawmaker who was a co-leader of the Parliament negotiations on the draft law, said…”<br /><br />March 11 – Bloomberg (Emily Graffeo): “Artificial-intelligence bulls are increasingly gravitating toward an ETF that amps up bets on Nvidia Corp. as trading volumes and inflows hit all-time highs. After notching a record $252 million in fresh capital last week, the GraniteShares 2x Long NVDA Daily exchange-traded fund (ticker NVDL) saw its second-biggest trading volume on Monday as Wall Street’s AI darling extended its Friday retreat. The fund, which gives investors two times the daily return of the underlying stock, has grown to $1.4 billion since launching at the end of 2022.”<br /><br /><span style="font-size: large;">Bubble and Mania Watch:</span><br /><br />March 10 – Financial Times (Will Louch): “Private equity groups globally are sitting on a record 28,000 unsold companies worth more than $3tn, as a sharp slowdown in dealmaking creates a crunch for investors looking to sell assets. The numbers, revealed in consultancy firm Bain & Co’s annual private equity report, show how rapidly the industry has grown over the past decade, as well as the challenges it faces from higher interest rates… ‘It may be another two to three years before the money starts to come back [to investors],’ Hugh MacArthur, chair of Bain’s private equity practice, told the Financial Times. ‘It’s probably the number one concern in the marketplace right now.’”<br /><br />March 11 – Bloomberg (Elijah Nicholson-Messmer): “A wave of investor interest is driving billions of dollars into cryptocurrency assets this year, pushing inflows to record-breaking levels, according to CoinShares International Ltd. A record $2.7 billion flowed into crypto assets last week… The bulk of the flows went toward Bitcoin... Earlier on Monday, Bitcoin topped $72,000 for the first time ever, and has now notched six straight days of gains.”<br />March 14 – Bloomberg (Jeffry Bartash): “Bitcoin played the ‘anti-hero’ this week, stealing the spotlight from pop icons Taylor Swift and Beyoncé in Google search popularity. Bitcoin’s record-breaking rally has sent searches for the largest cryptocurrency to their highest point in over a year, attracting more US searches than the two music artists combined over the last week, according to Google Trends data. Bitcoin has repeatedly set new all-time highs in recent days as investors pour into the digital asset.”<br /><br />March 12 – Reuters (Nick Carey): “Global sales of fully electric and plug-in hybrid vehicles (PHEVs) rose at a tepid rate of 3% in February versus the same period last year mainly due to the impact of the Chinese Lunar New Year celebrations, market research firm Rho Motion said… The company said global sales hit 800,000 units. Sales in Europe grew 12% versus February of last year and rose 31% in the U.S. and Canada, but they fell 12% in China.”<br /><br />March 13 – Reuters (Iain Withers): “The troubled U.S. office market is the world's most oversupplied and property investors have taken on too much debt, a Brookfield Asset Management executive said… ‘Per capita, it's the most oversupplied office market in the world,’ Bradley Weismiller, Brookfield's managing partner for real estate capital markets, told the MIPIM property conference. ‘That’s really the story. Unfortunately we (the U.S.) build too much of it in certain places ... and it doesn’t need to be used as office anymore,’ Weismiller said… ‘The sector as a whole borrowed too much money,’ he added.”<br /><br />March 11 – Wall Street Journal (Anne Tergesen): “The 401(k) is doing double duty as both a retirement account and a source of emergency funds for more Americans. A record share of 401(k) account holders took early withdrawals from their accounts last year for financial emergencies, according to… Vanguard Group. Overall, 3.6% of its plan participants did so last year, up from 2.8% in 2022 and a prepandemic average of about 2%... Values in these accounts have risen substantially, in part because of a strong stock market and programs that automatically funnel money from people’s paychecks into their 401(k) accounts. These surging balances, however, have helped make more people comfortable dipping into their accounts when needed.”<br /><br /><span style="font-size: large;">U.S./Russia/China/Europe Watch:</span><br /><br />March 11 – Reuters (Patricia Zengerle and Jonathan Landay): “U.S. intelligence agencies said… the country faces an ‘increasingly fragile world order,’ strained by great power competition, transnational challenges and regional conflicts, in a report released as agency leaders testified in Congress. ‘An ambitious but anxious China, a confrontational Russia, some regional powers, such as Iran, and more capable non-state actors are challenging longstanding rules of the international system as well as U.S. primacy within it,’ the agencies said in their 2024 Annual Threat Assessment.”<br /><br />March 12 – Financial Times (Max Seddon): “Vladimir Putin has said Russia is prepared for a nuclear war, delivering a crude warning to the west as his army advances on the Ukrainian battlefield more than two years into its full-scale invasion. The Russian president boasted that his nuclear forces were on ‘constant alert’, claimed that Russia had surpassed the US in developing a new generation of nuclear-capable weapons and said testing could resume in a state television interview broadcast… ‘From the military-technical point of view we are, of course, prepared,’ Putin said. ‘[The US is] developing their components. So are we. That doesn’t mean, in my view, that they are prepared to start this nuclear war tomorrow. If they are — what can we do? We’re prepared.’”<br /><br />March 11 – Reuters: “Russia said a group of its warships had arrived in Iran to take part in drills with Iran and China in the Gulf of Oman and the Arabian Sea. The joint exercises, called ‘Maritime Security Belt – 2024’, will involve warships and aviation, the Russian defence ministry said… ‘The practical part of the exercise will take place in the waters of the Gulf of Oman of the Arabian Sea,’ the ministry said. ‘The main purpose of the maneuvers is to work out the safety of maritime economic activity.’”<br /><br /><span style="font-size: large;">De-globalization and Iron Curtain Watch:</span><br /><br />March 12 – New York Times (Keith Bradsher): “China’s factory exports are powering ahead faster than almost anyone expected, putting jobs around the world in jeopardy and setting off a backlash that is gaining momentum. From steel and cars to consumer electronics and solar panels, Chinese factories are finding more overseas buyers for goods. The world’s appetite for its goods is welcomed by China, which is enduring a severe downturn… But other countries are increasingly concerned that China’s rise is coming partly at their expense… The European Union announced last week that it was preparing to charge tariffs, which are import taxes, on all electric cars arriving from China. The European Union said that it had found ‘substantial evidence’ that Chinese government agencies have been illegally subsidizing these exports…”<br /><br />March 9 – Financial Times (Ryan McMorrow, Nian Liu, Gloria Li, and Michael Acton): “Apple and Tesla cracked China, but now the two largest US consumer companies in the country are experiencing cracks in their own strategies as domestic rivals gain ground and patriotic buying often trumps their allure. Falling market share and sales figures reported this month indicate the two groups face rising competition and the whiplash of US-China geopolitical tensions. Both have turned to discounting to try to maintain their appeal. A shift away from Apple, in particular, has been sharp, spurred on by a top-down campaign to reduce iPhone usage among state employees and the triumphant return of Chinese national champion Huawei…”<br /><br /><span style="font-size: large;">Inflation Watch:</span><br /><br />March 11 – CNBC (Jeff Cox): “Consumers increasingly doubt the Federal Reserve can achieve its inflation goals anytime soon, according to a survey… from the New York Federal Reserve. While the outlook over the next year was unchanged at 3%, that wasn’t the case for the longer term. At the three-year range, expectations rose 0.3 percentage point to 2.7%, while the five-year outlook jumped even more, up 0.4 percentage point to 2.9%. All three are well ahead of the Fed’s 2% goal for 12-month inflation…”<br /><br />March 12 – Reuters (Ann Saphir): “A second straight month of stronger-than-expected inflation has effectively shut the door on the possibility of a Federal Reserve interest-rate cut before June… Gasoline and shelter prices drove the February consumer price index up 3.2% versus a year earlier, an acceleration from January's 3.1% increase. Underlying core inflation, excluding gas and food prices, slowed less than economists had forecast, and on a three-month and six-month basis actually gained traction… Tuesday's inflation report ‘is an ugly read that will do nothing to sooth nerves’ at the Fed, wrote BMO economist Scott Anderson. ‘Clearly, restrictive monetary policy has not yet fully done its work and a patient and slightly hawkish Fed must remain in place for the monetary medicine to fully take effect.’ Core services inflation excluding rents, a measure to which Fed Chair Jerome Powell has said he pays close attention, rose 0.5% in February from a month earlier, and over the past three months is up on an annualized basis by 6.8%, compared with the 6.7% pace in January.”<br /><br />March 14 – Associated Press (Christopher Rugaber): “Wholesale prices in the United States accelerated again in February, the latest sign that inflation pressures in the economy remain elevated and might not cool in the coming months as fast as the Federal Reserve or the Biden administration would like. The… producer price index… rose 0.6% from January to February, up from a 0.3% rise the previous month. Measured year over year, producer prices rose by 1.6% in February, the most since last September… Higher wholesale gas prices, which jumped 6.8% just from January to February, drove much of last month’s increase. Wholesale grocery costs also posted a large gain, rising 1%.”<br /><br />March 12 – New York Times (Jeanna Smialek): “It is costing Americans more to protect against disaster, a development that is pushing up official inflation figures. Various kinds of insurance — including car, medical and property protection — are costing more… Although it is tough for economic policymakers to do much to snuff out the various drivers behind the trend, the pressure is helping to increase overall prices. ‘Insurance of various different kinds — housing insurance, but also automobile insurance, and things like that — that’s been a significant source of inflation over the last few years,’ Jerome H. Powell, the Federal Reserve chair, said during congressional testimony... ‘And it’s to do with a million different factors.’”<br /><br />March 10 – Wall Street Journal (Heather Haddon): “If you are hungry for barbecue on a Saturday night this month, a delivery of a pulled-pork sandwich from Cali BBQ could cost you around $18. Or you could hold off a few days and order the same sandwich delivered on a weekday afternoon for around $12. Restaurants like… Cali BBQ are experimenting with a form of the dynamic pricing long used by airlines, hotels and ride-hailing services. Technology providers are pitching services that enable restaurants to change prices weekly or monthly, increasing or slashing the cost… depending on demand and sales patterns.”<br /><br />March 14 – Reuters (Maytaal Angel and Maxwell Akalaare Adombila): “Major African cocoa plants in Ivory Coast and Ghana have stopped or cut processing because they cannot afford to buy beans…, meaning chocolate prices around the world are likely to soar. Chocolate-makers have already increased prices to consumers, after three years of poor cocoa harvests, with a fourth expected, in the two countries that produce nearly 60% of the world's cocoa.”<br /><br /><span style="font-size: large;">Federal Reserve Watch:</span><br /><br />March 11 – Reuters (Michael S. Derby): “A Federal Reserve facility launched in haste a year ago amid the heavy stress triggered by Silicon Valley Bank's collapse closes for new business on Monday, amid evidence it helped turn the tide of trouble that risked derailing the economy and upending the central bank’s efforts to lower inflation. A year after the Bank Term Funding Program was unveiled on a Sunday afternoon -- when regulators feared a systemwide bank run might unfold the next day -- deposits have stabilized, bank loan books overall are growing, no bank of meaningful size has failed in 10 months, and the Fed was not forced to change its monetary policy footing.”<br /><br /><span style="font-size: large;">Biden Administration Watch:</span><br /><br />March 13 – Bloomberg (Viktoria Dendrinou and Christopher Condon): “US Treasury Secretary Janet Yellen said it’s ‘unlikely’ that market interest rates will return to levels that prevailed before the Covid-19 pandemic triggered a wave of inflation and higher yields. Asked why White House projections… showed markedly higher expectations for interest rates in coming years compared with projections a year ago, Yellen said the new numbers were in line with private sector forecasts.”<br /><br /><span style="font-size: large;">U.S. Bubble Watch:</span><br /><br />March 12 – Reuters (Dan Burns): “The U.S. federal budget deficit grew in February… The deficit last month was $296 billion, 13% larger than the $262 billion shortfall in February 2023. Outlays for the month grew 8% to $567 billion - a record for the month - while receipts rose 3% to $271 billion. For the first five months of the fiscal year, the deficit rose by $106 billion, or 15%, to $828 billion… The Treasury said both receipts and outlays were records on a year-to-date basis, with receipts up 7% to $1.856 trillion, and outlays up 9% to $2.684 trillion… Interest expenses on the $26 trillion national debt continue to grow rapidly, with debt-servicing costs up 67% from February 2023 to $76 billion… On a year-to-date basis, interest on the public debt rose 41% to $433 billion and for the first five months of the fiscal year was exceeded only by Social Security in individual line item expenses. The weighted-average interest rate on Treasury securities rose to 3.2% in February from 2.52% a year ago and 3.15% in January.”<br /><br />March 13 – Bloomberg (Christopher Anstey): “Harvard University economics professor Kenneth Rogoff said both President Joe Biden and his predecessor and challenger Donald Trump risk sending US debt levels into dangerous territory as Washington fails to grasp that the era of ultra-low interest rates won’t come back. Washington in general has a very relaxed attitude towards debt that I think they’re going to be sorry about,” Rogoff said… ‘It’s just not the free lunch that Congress and perhaps the two presidential candidates have gotten used to.’”<br /><br />March 14 – Dow Jones (Jeffry Bartash): “Strong labor market keeps U.S. out of recession… The number of Americans who applied for unemployment benefits last week slipped to 209,000 and continued to signal a strong labor market and low level of layoffs. Economists… had forecast new claims to total 218,000… New jobless claims have ranged from 194,000 to 225,000 a week in the first three months of 2024, an extremely low level from a historical perspective… The number of people collecting unemployment benefits in the U.S., meanwhile, rose by 17,000 to 1.81 million…”<br /><br />March 14 – Associated Press (Anne D’Innocenzio): “Americans picked up their spending a bit in February after pulling back the previous month. But last month’s gain was weaker than expected, and January’s decline was revised even lower, suggesting that many are growing more cautious with their money. Retail sales rose 0.6% last month after falling a revised 1.1% in January, dragged down in part by inclement weather…”<br /><br />March 12 – CNBC (Steve Liesman): “Consumer spending bounced back in February from a January dip, with a little help from leap day. But sales still registered good gains even after correcting for that extra spending day. The CNBC/NRF Retail Monitor, derived from actual credit card spending data from Affinity Solutions, rose 1.06% in February, when excluding autos and gas.”<br /><br />March 10 – NBC (J.J. McCorvey): “Buying now and paying later is still a popular way to splurge on airfare to Cabo. It’s an increasingly common way to buy groceries and lawn furniture, too. Consumers ages 35 and under comprise 53% of ‘buy now, pay later’ users but just 35% of traditional credit card holders, according to LexisNexis Risk Solutions. Many of those core ‘BNPL’ borrowers have grown so comfortable using the installment loans for just-out-of-reach luxuries that they’re putting more everyday purchases on them as well. Apparel and accessories were the most popular product category among millennial (ages 30-44) and Gen Z (18-29) users of the BNPL provider Afterpay in 2021 and 2022. But last year it fell to fourth place behind ‘arts, travel and entertainment,’ ‘home and garden’ and hardware’… The shift adds to signs that fast-growing BNPL services… are becoming a routine tool in young adults’ wallets as they adapt to higher prices.”<br /><br />March 13 – CNBC (Diana Olick): “Mortgage rates swung slightly lower last week, fueling a significant jump in mortgage demand for the second straight week… Applications for a mortgage to purchase a home rose 5% for the week but were still 11% lower than a year ago. Homebuyers are up against more than just high interest rates. They are looking at sky-high home prices and a still lean supply of houses for sale. While more inventory is coming onto the market with the spring season, it is not enough to meet the demand, especially for smaller, starter homes.”<br /><br />March 12 – Reuters (Amina Niasse): “U.S. small business sentiment fell in February to the lowest level since May due to continued concerns around inflation… The monthly National Federation of Independent Business sentiment index fell to 89.4 in February from 89.9 in January. The reading marks the 26th-straight-month where the index remained below its 50-year average of 98. The share of owners citing inflation as their most pressing problem rose 3 points to 23%, the top concern for businesses according to the report… ‘While inflation pressures have eased since peaking in 2021, small business owners are still managing the elevated costs of higher prices and interest rates,’ said Bill Dunkelberg, NFIB's chief economist.”<br /><br />March 13 – CNBC (Eric Rosenbaum): “Chief financial officers at large companies see a U.S. economy and equities market that can continue to grow, even as fears about sticky inflation and a potentially overextended, and concentrated, bull run in stocks weigh on investors. That’s according to the CNBC CFO Council Survey for the first quarter of 2024… The percentage of CFOs who think the Fed will be able to achieve a soft landing has reached a five-quarter high, at 48%... CFOs don’t see rate anxiety as being a major short-term hurdle for stocks. Over 80% of CFOs believe the Dow Jones Industrial Average is more likely to continue its run up to the 40,000-point mark, with technology continuing to lead the way among sectors, than slip into a bear market.”<br /><br /><span style="font-size: large;">Fixed Income Watch:</span><br /><br />March 14 – Bloomberg (James Crombie): “Tighter policy in Japan means higher domestic yields, reducing the need for that investor base to stretch for returns elsewhere. That’s bad news for high-grade US corporate bonds, which have long had a significant buyer base in Japan. US credit markets have been worrying about an end to Japanese yield curve control since its demise was first rumored, well over a year ago. That and elevated yen-dollar hedging costs are seen as potential threats to demand for investment-grade bonds, which are being issued at a record pace this year.”<br /><br /><span style="font-size: large;">China Watch:</span><br /><br />March 11 – Associated Press (Elaine Kurtenbach and Ken Moritsugu): “China’s national legislature wrapped up its annual session Monday with the usual show of near-unanimous support for plans designed to carry out ruling Communist Party leader Xi Jinping’s vision for the nation. The weeklong event, replete with meetings carefully scripted to allow no surprises, has highlighted how China’s politics have become ever more calibrated to elevate Xi. Monday’s agenda lacked the usual closing news conference by the premier, the party’s No. 2 leader. The news conference has been held most years since 1988 and was the one time when journalists could directly question a top Chinese leader.”<br /><br />March 11 – Wall Street Journal (Brian Spegele): “This was supposed to be a story about a press conference with China’s premier. Each year for more than three decades, China’s No. 2 leader has concluded the country’s annual legislative meetings in Beijing by taking questions from journalists. Broadcast on national television, it has been one of the few chances Chinese people have had to hear a top official questioned directly about pressing issues facing the country. Until Monday. This year, Chinese Premier Li Qiang exited Beijing’s Great Hall of the People at the end of the session without fielding a single query—a potent reflection of the secrecy that shrouds decision-making in China as leader Xi Jinping tightens his grip in the face of growing challenges.” <br /><br />March 15 – Bloomberg: “China offered a surprise reminder to bankers swimming in a pool of cash for months now that its liquidity boost is aimed at rejuvenating the economy, not helping support financial speculation. Draining cash from the banking system Friday, policymakers said their support has already ‘fully’ satisfied financial institutions’ needs… While there are no signs that banks are desperate for cash, the move also underscored Beijing’s frustration that its monetary stimulus has had more of an impact in fueling a bond market rally than in lifting economic growth. The liquidity withdrawal — the first since 2022 for its most high-profile lending tool — has been also taken by some market watchers as a message that Beijing is conscious of the risks of speculative bubbles forming in even China’s safest assets. ‘The net drainage this time is a clear signal that the People’s Bank of China wants to squeeze out speculative funds from the market,’ said Zhaopeng Xing, senior China strategist at Australia and New Zealand Banking Group.”<br /><br />March 11 – Reuters: “China has asked banks to enhance financing support for state-backed China Vanke and called on creditors to consider private debt maturity extension, in a rare intervention from central government to help an embattled property firm, two sources said. The State Council - China's cabinet - is coordinating support effort for China Vanke…, adding financial institutions have been requested to make swift progress. Authorities are scrambling to stabilise a real estate sector in the throes of a debt crisis characterised by default among the country's biggest property firms, with support including boosting financing for developers of certain projects.”<br /><br />March 12 – Bloomberg: “China Vanke Co. is in talks with banks on a debt swap that would help the cash-strapped developer stave off its first-ever bond default, according to people familiar... Vanke’s major creditor banks are considering a plan to swap bond holdings worth tens of billions of yuan in principal into secured debt… The swap would help China’s second-largest real estate company avoid a public default while giving banks collateral to protect against any potential losses. The talks, coordinated by China’s financial regulators and the local government of Shenzhen, are ongoing… Vanke’s cash crunch has become a major focus for investors trying to gauge how much help China’s government and its banks will provide to the few remaining property giants that have so far avoided default.”<br /><br />March 11 – Bloomberg: “China Vanke Co. is facing resistance from the nation’s two largest banks on a new HK$4.5 billion ($575 million) offshore loan, according to people familiar…, in a major test of state support for the cash-strapped real-estate giant… ICBC and Construction Bank have asked Vanke to provide sufficient collateral to back the new loan but the developer was unwilling to do so, one of the people said. Without collateral or other forms of credit enhancement, the lenders would need clearing from regulators to proceed, the person added.”<br /><br />March 11 – Financial Times (Thomas Hale in Shanghai and Hudson Lockett): “Chinese developer Vanke’s bonds have been downgraded by Moody’s in the latest outbreak of stress across the country’s troubled property sector. Vanke, the second-largest developer in China by sales, is state-backed and had retained investment-grade ratings despite a wave of defaults in the sector since the 2021 collapse of China Evergrande. The company has in recent weeks become the focal point of a property slowdown that has piled pressure on policymakers in Beijing as they seek to boost confidence in the world’s second-largest economy.”<br /><br />March 15 – Wall Street Journal (Cao Li): “China’s real-estate market set an unwelcome record last month. The price of secondhand homes in the country’s most developed cities fell 6.3% in February compared to the same month last year. That was the worst year-on-year decline since the government started releasing data in 2011. It was part of a widespread drop in prices across the country, as China’s painful real-estate slump shows no signs of losing steam.”<br /><br />March 11 – CNBC (Evelyn Cheng): “China’s struggling real estate developers won’t be getting a major bailout, Chinese authorities have indicated, warning that those who ‘harm the interests of the masses’ will be punished. ‘For real estate companies that are seriously insolvent and have lost the ability to operate, those that must go bankrupt should go bankrupt, or be restructured, in accordance with the law and market principles,’ Ni Hong, Minister of Housing and Urban-Rural Development, said… ‘Those who commit acts that harm the interests of the masses will be resolutely investigated and punished in accordance with the law,’ he said. ‘They will be made to pay the due price.’”<br /><br />March 9 – Financial Times (Cheng Leng): “Officials from some of China’s most indebted provinces and cities have met leading state bankers in Beijing in recent days as they step up efforts to renegotiate debt payments on billions of dollars in liabilities that threaten to constrain growth in the world’s second-biggest economy. China’s local governments accumulated enormous liabilities over a decade-long, debt-fuelled building spree. While the infrastructure drive helped fuel growth, many local governments are now grappling with billions of dollars of off-balance sheet debt…”<br /><br />March 12 – Financial Times (Joe Leahy, Ryan McMorrow and Cheng Leng): “China is scrapping a string of infrastructure projects in indebted regions as it struggles to reconcile a need to save money with this year’s target for economic growth. Beijing has ordered a dozen highly indebted areas, many of them less-developed and far from the coast, to curb infrastructure spending as it tries to unwind a decade-long investment binge many believe is unsustainable. But analysts say the austerity drive may make it even more difficult to achieve the ambitious 5% target for annual growth set by Premier Li Qiang during China’s ‘Two Sessions’ political gathering this month — with potentially far-reaching implications for the global economy.”<br /><br />March 12 – Bloomberg: “Chinese regulators told some of the country’s lenders to limit their use of a repayment-support mechanism that has backed offshore bond issuance by local government financing vehicles, according to people familiar…. At least four commercial banks… were asked last week to limit use of the so-called standby letter of credit, or SBLC, which is a pledge by a lender to repay the debt if the issuer can’t…”<br /><br />March 14 – Bloomberg (Jackie Cai): “China’s banking regulator has started to scrutinize offshore holdings of local government financing vehicles’ debt at the nation’s financial institutions in Hong Kong, according to people familiar... The regulator contacted the Hong Kong units of several Chinese banks and insurers earlier this week and asked them to detail their holdings of dollar bonds issued by LGFVs… Officials were particularly interested in their exposure to bonds with tenors of less than one year, the people added.”<br /><br />March 8 – Bloomberg (Katia Dmitrieva): “China’s consumer prices rose for the first time since August, breaking a contraction streak that has put growth potential in the world’s second-largest economy under pressure. The consumer price index increased 0.7% in February from a year earlier…, rebounding from the biggest drop since 2009 in January. The gain was higher than analysts’ estimates of a 0.3% gain…”<br /><br />March 14 – Bloomberg: “China’s state funds bought around $50 billion of the nation’s equities over the past five months, with purchases slowing during the annual meeting of the nation’s top legislators, according to an analysis by Bloomberg Intelligence. The so-called National Team, including sovereign wealth fund Central Huijin Investment Ltd., made most of the purchases in late January and early February through exchange-traded funds...”<br /><br />March 13 – Wall Street Journal (Weilun Soon and Rebecca Feng): “China’s biggest quant funds beat the market for years by applying complicated statistical models to stock picking. But they didn’t model a key factor—the government. Quantitative funds, which use algorithms to chew masses of data and make trading decisions, have become a powerful force in the U.S., where funds such as AQR Capital Management, Renaissance Technologies and Millennium Management manage huge portfolios… But the industry has at times been controversial, being accused of herd behavior that exacerbates periods of volatility. China’s $200 billion quant fund industry is facing similar accusations, and the ramifications for the sector could be huge. These funds lost billions of dollars last month when their bets on small companies’ shares went wrong. They have found themselves in the crosshairs of Chinese regulators…”<br /><br />March 12 – Reuters: “Chinese Premier Li Qiang does not intend to hold a meeting with visiting foreign CEOs at the upcoming China Development Forum (CDF) in late March, three sources… said, raising concerns about Beijing's commitment to attract investment from abroad at a time of souring sentiment. Organised annually by Beijing since 2000 at the Diaoyutai State Guesthouse, the high-level forum traditionally serves as an opportunity for global CEOs and Chinese policymakers to meet and discuss foreign investment.”<br /><br /><span style="font-size: large;">Global Bubble Watch:</span><br /><br />March 14 – Bloomberg (Manuel Baigorri): “It wasn’t so long ago that Chinese companies — state-owned and private — had a reputation for snapping up all sorts of international assets, from airports to football clubs, as they rapidly expanded overseas. The craving for foreign trophies was so strong that dealmakers in Europe and the US would sometimes use mystery Chinese bidders as wild cards to make the sale process more competitive… That trend has gone into reverse, with cash-strapped companies… ditching expansionism and selling off assets instead. ‘Some Chinese conglomerates are now accelerating their asset disposals because some are faced with liquidity issues,’ said Samson Lo…, head of Asia Pacific mergers and acquisitions at UBS Group AG. ‘Those groups are under increasing pressure to raise cash and repay debt.’”<br /><br /><span style="font-size: large;">Central Banker Watch:</span><br /><br />March 13 – Bloomberg (William Horobin): “The European Central Bank will lower borrowing costs in the spring, with June more likely than April for a first move, Bank of France Governor Francois Villeroy de Galhau said. ‘We will probably cut rates in spring, and spring in Europe is from April to June 21,’ Villeroy said… ‘It’s perhaps more probable in June — we are very pragmatic and will see depending on the data.’ The ECB has policy decisions scheduled for April 11 and June 6, with the vast majority of Villeroy’s colleagues indicating the latter meeting will likely see the deposit rate start to be lowered…”<br /><br />March 13 – Financial Times (Martin Arnold): “The European Central Bank has announced one of the biggest overhauls of its connections to the financial system for a decade, outlining plans to lend more to commercial banks while shrinking its vast bond portfolio. The shift, which ECB governing council members agreed… on Wednesday, underlines how major central banks are rethinking the way they provide liquidity to the financial system while reducing the size of their balance sheets. Having pumped vast amounts of liquidity into the financial system for the past decade through massive bond-buying, the ECB has been debating for several months what ‘operational framework’ to switch to now that its assets are shrinking. The reduction of the ECB’s balance sheet means it will steadily drain excess liquidity from the banking system. At some point, this risks leaving lenders without sufficient reserves and could cause unwanted volatility in short-term borrowing costs and even a credit crunch.”<br /><br /><span style="font-size: large;">Japan Watch:</span><br /><br />March 12 – Bloomberg (Toru Fujioka and Sumio Ito): “Bank of Japan officials are edging closer to raising interest rates and will decide whether to move this month at next week’s policy meeting, with the outcome currently too close to call, according to people familiar with the matter. A final decision will be made after officials see the initial tally from spring wage talks due Friday…”<br /><br />March 11 – Bloomberg (Toru Fujioka): “The Bank of Japan is widely expected to scrap the world’s last negative interest rate in the coming weeks, marking the closing act of global central banks’ grand experiment with unorthodox policies. Governor Kazuo Ueda is forecast to raise the short-term rate from -0.1% either next week or in April in what would be the first rate hike in Japan since 2007… The move would mark a step toward mainstream policy after decades of experimentation saw the BOJ amass a mountain of bonds and equities, swelling its balance sheet to 127% of annual output.”<br /><br />March 10 – Financial Times (Kana Inagaki and Robin Harding): “Policymakers at the Bank of Japan are tackling a series of thorny policy debates as they confront the practicalities of raising interest rates for the first time since the summer of 2006. While Japan’s central bank has signalled that it is almost ready to end an unprecedented era of cheap money, with the first rate increase expected as early as March or April, it still faces a number of challenging decisions about how to leave negative rates behind without causing turmoil for global markets and Japanese lenders. Among those questions is whether to raise rates first to zero or directly into positive territory; what to do about the central bank’s vast bond portfolio; and most important of all, what to signal about the path of interest rates beyond the first increase.”<br /><br />March 13 – Reuters (Tetsushi Kajimoto and Anton Bridge): “Toyota Motor agreed to give factory workers their biggest pay increase in 25 years on Wednesday, heightening expectations that bumper pay raises will give the central bank leeway to make a key policy shift next week. Toyota, Panasonic, Nippon Steel, and Nissan were among some of Japan Inc's biggest names that agreed to fully meet union demands for pay hikes at annual wage negotiations that wrap on Wednesday.”<br /><br /><span style="font-size: large;">Emerging Market Watch:</span><br /><br />March 11 – Bloomberg (Zijia Song, Giovanna Bellotti Azevedo and Srinivasan Sivabalan): “The risk of government defaults in emerging markets this year is subsiding, stoking a rally in bonds that were just recently teetering on collapse and propelling junk-rated sovereign debt to its best start to a year since 2019… Only 10 countries are now flashing signs of distress in the bond market, half as many as in 2022.”<br /><br />March 11 – Financial Times (Emma Boyde): “Flows into emerging market equity exchange traded funds marked a new record in February, as activity by China’s ‘national team’ appeared to continue at pace. EM equity ETFs sucked in $28.2bn, an increase of more than 20% on the previous record set in January of $23.3bn and a third of the $85.5bn in total captured by equity ETFs globally during the month, according to BlackRock. The vast majority of this money was ploughed into domestic Chinese equity ETFs…”<br /><br />March 11 – Wall Street Journal (Megha Mandavia): “U.S. markets have been no stranger to meme-driven, casino-like trading in recent years. But on the other side of the world, a stock speculation boom is unfolding that makes GameStop and bitcoin look tame… India accounted for a staggering 78% of equity options contracts traded worldwide in 2023, according to data from the Futures Industry Association… The number of stock index options traded there reached 84.3 billion contracts last year, up 153% from 2022. Total futures and options turnover touched a notional value of $4.5 trillion on the National Stock Exchange on Thursday.”<br /><br /><span style="font-size: large;">Leveraged Speculation Watch:</span><br /><br />March 12 – Reuters (Carolina Mandl): “Hedge funds' use of leverage in equities trading is near record levels after debt-fueled strategies ballooned in recent years and an upturn in financial markets prompted riskier bets, according to two banking sources… Fresh data compiled by Goldman Sachs, JPMorgan and Morgan Stanley, the three largest global prime brokerages,… show that leverage used to juice up returns is at or close to historical highs... ‘Leverage is definitely at a high in the macro (hedge fund) world,’ said John Delano, a managing director at Commonfund… Goldman Sachs' note showed that hedge funds' leverage in equity positions was at almost three times their books compared with 2.35 times a year ago, and a record level over the past five years…”<br /><br />March 12 – Bloomberg (David Pan): “Demand for the investment vehicles that offer leveraged exposure to Bitcoin is soaring as the digital asset hits record highs. Leveraged futures-based exchange-traded funds such as VolatilityShares’ 2x Bitcoin Strategy ETF (BITX) are seeing flows rivaling spot Bitcoin ETFs. The fund raked in $630 million in net monthly inflows, beaten only by BlackRock and Fidelity…”<br /><br /><span style="font-size: large;">Social, Political, Environmental, Cybersecurity Instability Watch:</span><br /><br />March 9 – Bloomberg (David Pan): “After recovering from a near-death experience during the most recent crypto winter, Bitcoin miners are back in survival mode — spending billions of dollars on equipment and drawing energy at a record pace ahead of an update in the digital currency’s code that threatens revenue streams. The surge in activity is sparked by a runup in the world’s largest cryptocurrency, fueled by newly launched spot Bitcoin exchange-traded funds, and a quadrennial event called the halving that is slated to take place in April… Since February 2023, 13 of the top mining companies have placed orders for over $1 billion worth of specialized computers, according to data compiled by TheMinerMag based on public filings.”<br /><br /><span style="font-size: large;">Geopolitical Watch:</span><br /><br />March 11 – Bloomberg (Andreo Calonzo and Manolo Serapio Jr.): “The Philippines is counting on the US and its allies to play a crucial role in its plans to explore energy resources in the disputed South China Sea, according to Manila’s envoy to Washington. The country is seeking to parlay its deepening security ties with Washington into broader economic benefits, said Philippine Ambassador to the US Jose Manuel Romualdez. ‘When the time comes that we are going to start exploring it, we’ll have the options to be able to see how we can secure the expedition,’ Romualdez said... ‘We’re working closely with our allies, not only the US but also Japan and Australia,’ he said.”<br /><br />March 12 – Reuters (Mircely Guanipa, Deisy Buitrago and Marianna Parraga): “Iran and Venezuela are trying to patch together an oil alliance that began to fray last year, according to six people…, after the South American country fell behind on oil swaps that had boosted crude exports and helped stem domestic fuel shortages. The expected April return of U.S. sanctions on Venezuela's oil industry will make the Iran alliance critical to keeping its lagging energy sector afloat. Washington last year temporarily relaxed sanctions on Venezuela's promise to allow a competitive presidential election, something that has not happened.”</div></div>Doug Nolandhttp://www.blogger.com/profile/16205512922521957121noreply@blogger.comtag:blogger.com,1999:blog-8372678976953624833.post-6380800996478814472024-03-14T21:01:00.000-07:002024-03-15T06:00:28.629-07:00Friday's News Links<p><a href="https://ca.finance.yahoo.com/news/asian-shares-fall-us-stock-224136556.html">[Yahoo/Bloomberg] Stocks, Treasuries Steady at End of Volatile Week: Markets Wrap</a></p><p><a href="https://ca.finance.yahoo.com/news/oil-holds-four-month-high-232812207.html">[Yahoo/Bloomberg] Oil Holds Near Four-Month High as IEA Flips Forecast to Deficit</a></p><p><a href="https://ca.finance.yahoo.com/news/copper-resumes-rally-toward-9-032740487.html">[Yahoo/Bloomberg] Copper Surges on Supply Threat as Iron Ore Shows Economic Risks</a></p><p><a href="https://ca.finance.yahoo.com/news/bitcoin-retreats-record-high-bubble-031039357.html">[Yahoo/Bloomberg] Bitcoin Extends Retreat From Record as ‘Bubble’ Talk Escalates</a></p><p><a href="https://ca.finance.yahoo.com/news/ship-hit-missile-red-sea-074413803.html">[Yahoo/Bloomberg] Missile Misses Ship in Red Sea as Houthis Vow More Attacks</a></p><p><a href="https://ca.finance.yahoo.com/news/fed-gets-more-reasons-delay-153144437.html">[Yahoo/Bloomberg] Fed Gets More Reasons to Delay Interest-Rate Cuts </a></p><p><a href="https://www.reuters.com/markets/us/peak-rates-boost-us-demand-riskier-form-corporate-debt-2024-03-15/">[Reuters] Peak rates boost U.S. demand for riskier form of corporate debt</a></p><p><a href="https://apnews.com/article/home-sales-listings-price-reductions-affordability-bfd3a3bd9d9232b6fedd8e349d2d9a43">[AP] Home sellers are cutting list prices as spring buying season starts with higher mortgage rates</a></p><p><a href="https://ca.finance.yahoo.com/news/american-debt-stings-never-era-110029834.html">[Yahoo/Bloomberg] American Debt Stings Like Never Before in New Era for Households</a></p><p><a href="https://ca.finance.yahoo.com/news/us-stocks-see-record-inflows-082558490.html">[Yahoo/Bloomberg] BofA Says Record Rush to US Stocks Ignores Stagflation Risk</a></p><p><a href="https://ca.finance.yahoo.com/news/texas-strained-power-grid-poised-221027300.html">[Yahoo/Bloomberg] Strained Texas Power Grid Is Poised to Lose a Big Gas Plant</a></p><p><a href="https://www.reuters.com/markets/asia/boj-preparing-end-negative-interest-rate-policy-march-meeting-jiji-reports-2024-03-14/">[Reuters] BOJ preparing to end negative interest rate policy at March meeting, Jiji reports</a></p><p><a href="https://ca.finance.yahoo.com/news/market-players-await-wage-result-231502955.html">[Yahoo/Bloomberg] Japan’s Blowout Wage Result May Spur BOJ March Rate Hike Chatter</a></p><p><a href="https://ca.finance.yahoo.com/news/china-loans-grow-slowest-pace-094918841.html">[Yahoo/Bloomberg] China Loans Grow at Slowest Pace on Record Amid Weak Demand</a></p><p><a href="https://www.reuters.com/business/finance/china-feb-new-bank-loans-dip-145-trln-yuan-reuters-calculations-show-2024-03-15/">[Reuters] China Feb new bank loans dip more than expected, lending growth at record low</a></p><p><a href="https://www.reuters.com/world/china/chinas-feb-new-home-prices-extend-declines-2024-03-15/">[Reuters] China's home prices extend declines despite support measures</a></p><p><a href="https://ca.finance.yahoo.com/news/china-signals-liquidity-party-limits-081220812.html">[Yahoo/Bloomberg] China Signals Liquidity Is to Fuel Growth, Not Speculation</a></p><p><a href="https://ca.finance.yahoo.com/news/china-drains-cash-via-key-020010771.html">[Yahoo/Bloomberg] China Drains Cash Via Key Funding Tool for First Time Since 2022</a></p><p><a href="https://www.reuters.com/markets/rates-bonds/china-cbank-leaves-key-policy-rate-unchanged-expected-2024-03-15/">[Reuters] China c.bank leaves key policy rate unchanged, as expected</a></p><p><a href="https://www.reuters.com/markets/europe/tight-monetary-stance-needed-many-emerging-european-economies-says-imf-2024-03-15/">[Reuters] Tight monetary stance needed in many emerging European economies, says IMF</a></p><p><a href="https://www.reuters.com/world/india/india-cenbank-widens-scrutiny-credit-exuberance-sources-say-2024-03-15/">[Reuters] Exclusive: India cenbank widens scrutiny of credit 'exuberance', sources say</a></p><p><a href="https://www.bloomberg.com/news/features/2024-03-14/putin-digs-in-for-ukraine-victory-with-west-in-disarray?srnd=homepage-americas&sref=eo0IIyEe">[Bloomberg] Putin Digs In to Divide World Order While He Conquers at Home</a></p><p><a href="https://www.nytimes.com/2024/03/14/business/commercial-real-estate-tax-revenue.html">[NYT] Cities Face Cutbacks as Commercial Real Estate Prices Tumble</a></p><p><a href="https://www.nytimes.com/2024/03/14/world/europe/ukraine-drone-strike-russia-oil.html">[NYT] Ukraine, Stalled on the Battlefield, Targets Russia’s Oil Industry</a></p><p><a href="https://www.wsj.com/world/china/chinese-home-prices-decline-but-at-steady-pace-e2cb94f8?mod=latest_headlines">[WSJ] China’s Real-Estate Market Just Set a Record—but Not a Good One</a></p><p><a href="https://www.wsj.com/world/russia/russia-election-vladimir-putin-president-152a5511?mod=latest_headlines">[WSJ] Putin Puts Clash With West at Center of Presidential Election</a></p><p><a href="https://www.ft.com/content/482460c2-3ce8-44d3-af3c-afc5e523ccc8">[FT] We should fear a sticky inflation mess</a></p><p><a href="https://www.ft.com/content/e1ffbcb4-3222-4a8e-be61-e3a6051567f5">[FT] State-linked Vanke is latest Chinese property group hit by confidence crisis</a></p>Doug Nolandhttp://www.blogger.com/profile/16205512922521957121noreply@blogger.comtag:blogger.com,1999:blog-8372678976953624833.post-60824982008907934282024-03-14T15:48:00.000-07:002024-03-14T15:48:42.547-07:00Thursday Evening Links<p><a href="https://www.cnbc.com/2024/03/14/stock-market-today-live-updates.html">[CNBC] Stock futures are little changed after strong inflation data spooks investors: Live updates</a></p><p><a href="https://www.cnbc.com/2024/03/14/this-week-provided-a-reminder-that-inflation-isnt-going-away-anytime-soon.html">[CNBC] This week provided a reminder that inflation isn’t going away anytime soon</a></p><p><a href="https://www.reuters.com/world/us/us-forecaster-sees-higher-chance-la-nina-conditions-this-summer-2024-03-14/">[Reuters] US forecaster sees higher chance of La Nina conditions this summer</a></p><p><a href="https://www.bloomberg.com/news/articles/2024-03-14/does-china-s-fiscal-stimulus-plan-square-with-gdp-growth-goal?srnd=markets-vp&sref=eo0IIyEe">[Bloomberg] China’s Fiscal Stimulus Plan May Be Bigger Than It Appeared</a></p>Doug Nolandhttp://www.blogger.com/profile/16205512922521957121noreply@blogger.comtag:blogger.com,1999:blog-8372678976953624833.post-8257724645907067562024-03-14T10:15:00.000-07:002024-03-14T10:26:22.728-07:00Thursday Afternoon Links<p><a href="https://ca.finance.yahoo.com/news/asia-stocks-primed-cautious-open-223247586.html">[Yahoo/Bloomberg] Bond Yields Jump as Hot Inflation Curbs Fed Wagers: Markets Wrap</a></p><p><a href="https://www.reuters.com/markets/us/futures-rise-run-up-inflation-figures-retail-sales-data-2024-03-14/">[Reuters] Wall St dips as traders assess hot inflation data; chip stocks weigh</a></p><p><a href="https://www.reuters.com/business/energy/oil-prices-underpinned-by-us-inventory-data-attacks-russian-refineries-2024-03-14/">[Reuters] Oil prices rise as revised IEA outlook suggests tighter market</a></p><p><a href="https://www.reuters.com/markets/us/us-retail-sales-rebound-february-weekly-jobless-claims-fall-2024-03-14/">[Reuters] US retail sales miss expectations; producer prices accelerate</a></p><p><a href="https://www.morningstar.com/news/marketwatch/20240314311/jobless-claims-dip-to-209000-and-still-show-no-sign-of-rising-layoffs">[Dow Jones] Jobless claims dip to 209,000 and still show no sign of rising layoffs</a></p><p><a href="https://ca.finance.yahoo.com/news/us-mortgage-rates-decrease-second-160000961.html">[Yahoo/Bloomberg] US Mortgage Rates Decrease for Second Week, Falling to 6.74%</a></p><p><a href="https://www.bloomberg.com/news/articles/2024-03-14/bitcoin-tops-taylor-swift-beyonce-in-google-search-popularity?srnd=homepage-americas&sref=eo0IIyEe">[Bloomberg] Bitcoin Tops Taylor Swift, Beyoncé in Google Search</a></p><p><a href="https://www.ft.com/content/f811649b-f66d-43aa-8a66-2412a4f0be50">[FT] Corporate defaults at highest rate since global financial crisis, says S&P</a></p>Doug Nolandhttp://www.blogger.com/profile/16205512922521957121noreply@blogger.comtag:blogger.com,1999:blog-8372678976953624833.post-21216273828367536302024-03-14T05:23:00.000-07:002024-03-14T06:00:46.398-07:00Thursday's News Links<p><a href="https://ca.finance.yahoo.com/news/asia-stocks-primed-cautious-open-223247586.html">[Yahoo/Bloomberg] Stocks Advance With US Inflation in Focus: Markets Wrap</a></p><p><a href="https://www.cnbc.com/2024/03/14/us-treasury-yields-investors-await-wholesale-inflation-data.html">[CNBC] Treasury yields rise after February wholesale inflation turns out hotter-than-expected</a></p><p><a href="https://ca.finance.yahoo.com/news/oil-holds-biggest-gain-five-000519118.html">[Yahoo/Bloomberg] Oil Advances as IEA Predicts Supply Deficit for Rest of 2024</a></p><p><a href="https://ca.finance.yahoo.com/news/high-hopes-yen-rally-way-014849754.html">[Yahoo/Bloomberg] High Hopes for Yen Rally This Year Give Way to Talk of Slim Gain</a></p><p><a href="https://www.cnbc.com/2024/03/14/producer-price-index-february-2024-wholesale-inflation-rose-0point6percent-in-february.html">[CNBC] Wholesale inflation rose 0.6% in February, more than expected</a></p><p><a href="https://apnews.com/article/inflation-wholesale-prices-consumer-federal-reserve-rates-b0456bd9bdc0cfdb5945f443ff75d865">[AP] US wholesale prices picked up in February in sign that inflation pressures remain elevated</a></p><p><a href="https://apnews.com/article/retail-sales-economy-inflation-9136c3aeecb2afeee14a3a4b64ab3773">[AP] Retail sales up 0.6% in February, bouncing back from decline to start the year</a></p><p><a href="https://ca.finance.yahoo.com/news/bond-traders-prep-dot-plot-103000695.html">[Yahoo/Bloomberg] Bond Traders Prep for New Dot Plot, With Three Cuts in Question</a></p><p><a href="https://ca.finance.yahoo.com/news/oil-markets-face-supply-deficit-090000322.html">[Yahoo/Bloomberg] Oil Markets Face Supply Deficit on OPEC+ Curbs, IEA Says</a></p><p><a href="https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-pix-2024-03-13/">[Reuters] Morning Bid: Count down to Japan's date with destiny</a></p><p><a href="https://ca.finance.yahoo.com/news/china-vanke-dollar-bonds-signal-230000743.html">[Yahoo/Bloomberg] China Vanke’s Dollar Bonds Signal Fears of Default Down the Road</a></p><p><a href="https://ca.finance.yahoo.com/news/china-national-team-cools-etf-074543353.html">[Yahoo/Bloomberg] China’s National Team Cools ETF Buying After $50 Billion Spree</a></p><p><a href="https://ca.finance.yahoo.com/news/china-conglomerates-speed-asset-sales-071304243.html">[Yahoo/Bloomberg] China Conglomerates Speed Up Asset Sales to Beat Credit Squeeze</a></p><p><a href="https://ca.finance.yahoo.com/news/copper-marches-toward-9-000-021410934.html">[Yahoo/Bloomberg] China’s Copper Smelters Vow Capacity Controls After Fees Plunge</a></p><p><a href="https://ca.finance.yahoo.com/news/80-billion-crash-india-small-032358087.html">[Yahoo/Bloomberg] An $80 Billion Crash in India’s Small Caps Flashes Warning Signs</a></p><p><a href="https://www.reuters.com/markets/commodities/african-cocoa-plants-run-out-beans-global-chocolate-crisis-deepens-2024-03-13/">[Reuters] Exclusive: African cocoa plants run out of beans as global chocolate crisis deepens</a></p><p><a href="https://www.wsj.com/finance/investing/private-equity-wants-your-credit-card-debt-and-car-loan-and-mortgage-49be8938?mod=latest_headlines">[WSJ] Private Equity Wants Your Credit Card Debt. And Car Loan. And Mortgage.</a></p><p><a href="https://www.ft.com/content/6d450ae0-0727-4ae8-a3f9-db9a63371fdd">[FT] European corporate credit spreads hit two-year low as rate cut hopes shift</a></p><p><a href="https://www.ft.com/content/b255d7b9-88f6-4481-a3a6-87542d2b728b">[FT] Zombie car factories on the rise in China as buyers opt for EVs</a></p>Doug Nolandhttp://www.blogger.com/profile/16205512922521957121noreply@blogger.comtag:blogger.com,1999:blog-8372678976953624833.post-76715946545808463862024-03-13T14:24:00.000-07:002024-03-13T14:24:02.399-07:00Wednesday Evening Links<p><a href="https://ca.finance.yahoo.com/news/most-asia-stocks-eye-gains-222705535.html">[Yahoo/Bloomberg] Stocks Struggle Near Record Before Inflation Data: Markets Wrap</a></p><p><a href="https://ca.finance.yahoo.com/news/oil-climbs-industry-report-points-000547273.html">[Yahoo/Bloomberg] Oil Advances on Russian Refinery Attack, US Stockpile Drawdown</a></p><p><a href="https://ca.finance.yahoo.com/news/yellen-says-us-rates-unlikely-201947901.html">[Yahoo/Bloomberg] Yellen Says US Rates ‘Unlikely’ to Return to Pre-Covid Levels</a></p><p><a href="https://ca.finance.yahoo.com/news/rogoff-says-biden-trump-favor-174121161.html">[Yahoo/Bloomberg] Rogoff Says Biden, Trump Favor ‘Blowing Up’ US Debt</a></p><p><a href="https://www.npr.org/2024/03/13/1237501725/house-vote-tiktok-ban">[NPR] Why the House voted to ban TikTok and what could come next</a></p><p><a href="https://www.reuters.com/markets/us/us-office-market-is-worlds-most-oversupplied-brookfield-tells-mipim-2024-03-13/">[Reuters] US office market is world's most oversupplied, Brookfield tells MIPIM</a></p><p><a href="https://ca.finance.yahoo.com/news/fed-says-basis-trade-significantly-182213482.html">[Yahoo/Bloomberg] Fed Says Basis Trade ‘Significantly’ Smaller Than Estimated</a></p><p><a href="https://www.reuters.com/business/energy/russian-refineries-targeted-by-ukrainian-drones-2024-03-13/">[Reuters] The Russian refineries targeted by Ukrainian drones</a></p>Doug Nolandhttp://www.blogger.com/profile/16205512922521957121noreply@blogger.comtag:blogger.com,1999:blog-8372678976953624833.post-10452670053808286842024-03-13T09:46:00.000-07:002024-03-13T09:51:42.673-07:00Wednesday Afternoon Links<p><a href="https://ca.finance.yahoo.com/news/most-asia-stocks-eye-gains-222705535.html">[Yahoo/Bloomberg] Nasdaq 100 Drops 1% as Nvidia Leads Megacap Slide: Markets Wrap</a></p><p><a href="https://ca.finance.yahoo.com/news/oil-jumps-2-on-falling-us-inventories-drone-strikes-on-russian-refineries-154834966.html">[Yahoo Finance] Oil jumps 2% on falling US inventories, drone strikes on Russian refineries</a></p><p><a href="https://www.axios.com/2024/03/13/inflation-report-cpi-fed-interest-rates">[Axios] The Fed's inflation fight is starting to feel like a forever war</a></p><p><a href="https://www.reuters.com/world/china/rising-mortgage-defaults-bring-more-pain-chinese-households-2024-03-13/">[Reuters] Rising mortgage defaults bring more pain to Chinese households</a></p><p><a href="https://www.bloomberg.com/news/articles/2024-03-13/corporate-bond-rush-is-breaking-down-a-maturity-wall-that-everyone-feared?sref=eo0IIyEe">[Bloomberg] Corporate Bond Rush Is Breaking Down a Maturity Wall That Everyone Feared</a></p><p><a href="https://www.ft.com/content/5ac0fe73-9aea-4fe2-8cea-51d40702a82b">[FT] ECB to rely more on bank lending as it shrinks balance sheet</a></p>Doug Nolandhttp://www.blogger.com/profile/16205512922521957121noreply@blogger.comtag:blogger.com,1999:blog-8372678976953624833.post-88892231663993354462024-03-12T21:36:00.000-07:002024-03-13T05:51:01.634-07:00Wednesday's News Links<p><a href="https://ca.finance.yahoo.com/news/most-asia-stocks-eye-gains-222705535.html">[Yahoo/Bloomberg] Stocks Drift With Wall Street Rally Put on Pause: Markets Wrap</a></p><p><a href="https://ca.finance.yahoo.com/news/oil-climbs-industry-report-points-000547273.html">[Yahoo/Bloomberg] Oil Climbs as Industry Report Points to Falling US Stockpiles</a></p><p><a href="https://www.cnbc.com/2024/03/13/european-lawmakers-endorse-worlds-first-major-act-to-regulate-ai.html">[CNBC] World’s first major act to regulate AI passed by European lawmakers</a></p><p><a href="https://apnews.com/article/ai-act-european-union-chatbots-155157e2be2e42d0f1acca33983d8c82">[AP] Europe’s world-first AI rules get final approval from lawmakers. Here’s what happens next</a></p><p><a href="https://www.cnbc.com/2024/03/13/weekly-mortgage-demand-jumps-again-as-interest-rates-fall-below-7percent.html">[CNBC] Weekly mortgage demand jumps again as interest rates fall just below 7%</a></p><p><a href="https://www.cnbc.com/2024/03/13/cfos-are-as-bullish-on-the-dow-and-fed-as-theyve-been-in-a-long-time.html">[CNBC] Top CFOs are as bullish on the Dow and as dovish on the Fed as they’ve been in a long time: CNBC survey</a></p><p><a href="https://ca.finance.yahoo.com/news/ecb-more-likely-cut-rates-075344634.html">[Yahoo/Bloomberg] ECB More Likely to Cut in June Than April, Villeroy Says</a></p><p><a href="https://www.reuters.com/business/country-garden-onshore-bondholders-have-not-received-coupon-payment-news-site-2024-03-13/">[Reuters] Country Garden onshore bondholders have not received coupon payment, news site reports</a></p><p><a href="https://ca.finance.yahoo.com/news/boj-looks-final-piece-rate-210000558.html">[Yahoo/Bloomberg] BOJ Looks for Final Piece of Rate Puzzle in Wage Talks</a></p><p><a href="https://www.reuters.com/markets/asia/japan-inc-set-offer-big-wage-hikes-paving-way-end-negative-rates-2024-03-12/">[Reuters] Toyota agrees to biggest wage hike in 25 years in sign of Japan Inc's big pay bump</a></p><p><a href="https://www.reuters.com/business/autos-transportation/global-electric-car-sales-february-hurt-by-chinas-new-year-celebrations-2024-03-13/">[Reuters] Global electric car sales in February hurt by China's New Year celebrations</a></p><p><a href="https://ca.finance.yahoo.com/news/major-russian-oil-refinery-fire-075404268.html">[Yahoo/Bloomberg] Major Russian Oil Refinery on Fire After Drone Strike</a></p><p><a href="https://www.reuters.com/world/europe/ukraine-launches-drones-oryol-fuel-facility-other-regions-russia-says-2024-03-12/">[Reuters] Ukraine knocks out Russian refinery in major attack</a></p><p><a href="https://apnews.com/article/russia-ukraine-war-putin-nuclear-weapons-82ced2419d93ae733161b56fbd9b477d">[AP] Putin warns again that Russia is ready to use nuclear weapons if its sovereignty is threatened</a></p><p><a href="https://www.bloomberg.com/opinion/articles/2024-03-13/the-federal-reserve-will-slow-qt-what-matters-is-where-it-stops?srnd=markets-vp&sref=eo0IIyEe">[Bloomberg] Dudley: The Fed Will Slow QT. What Matters Is Where It Stops</a></p><p><a href="https://www.wsj.com/articles/prices-accelerate-cpi-federal-reserve-interest-rates-economy-84ed53e8?mod=latest_headlines">[WSJ] Hold the Inflation Champagne</a></p><p><a href="https://www.wsj.com/finance/regulation/how-china-tried-to-fix-the-stock-marketand-broke-the-quants-06d4e645?mod=latest_headlines">[WSJ] How China Tried to Fix the Stock Market—and Broke the Quants</a></p><p><a href="https://www.ft.com/content/901bc68e-ad35-42eb-97e0-542c631b9033">[FT] China’s treatment of local debt ‘ulcer’ threatens growth target</a></p><p><a href="https://www.ft.com/content/e04da727-ee9c-4e8c-94fa-2e7ad72bec24">[FT] Russia ‘prepared’ for nuclear war, warns Vladimir Putin</a></p>Doug Nolandhttp://www.blogger.com/profile/16205512922521957121noreply@blogger.comtag:blogger.com,1999:blog-8372678976953624833.post-2432148809465581342024-03-12T15:27:00.000-07:002024-03-12T15:27:24.353-07:00Tuesday Evening Links<p><a href="https://www.reuters.com/markets/us/sp-500-nasdaq-futures-edge-higher-ahead-key-inflation-test-2024-03-12/">[Reuters] S&P 500 posts record high close as Oracle jumps, traders keep rate-cut bets</a></p><p><a href="https://ca.finance.yahoo.com/news/trading-us-inflation-muddying-bond-100000133.html">[Yahoo/Bloomberg] Treasuries Extend Declines After Weak Demand for 10-Year Sale </a></p><p><a href="https://ca.finance.yahoo.com/news/oil-steadies-market-waits-opec-232800690.html">[Reuters] Oil Slips as OPEC Supply Cuts Stall Out, US Inflation Persists</a></p><p><a href="https://www.reuters.com/world/us/us-february-budget-deficit-climbs-interest-costs-tax-refunds-2024-03-12/">[Reuters] US February budget deficit climbs on interest costs, tax refunds</a></p><p><a href="https://ca.finance.yahoo.com/news/risk-appetite-bitcoin-spurs-enormous-191117882.html">[Yahoo/Bloomberg] Risk Appetite in Bitcoin Spurs ‘Enormous’ Leveraged ETF Flows</a></p><p><a href="https://ca.finance.yahoo.com/news/citadel-griffin-says-fed-slow-194714587.html">[Yahoo/Bloomberg] Citadel’s Griffin Says Fed Should Go Slow to Avoid ‘Devastating Course’</a></p><p><a href="https://www.cnbc.com/2024/03/12/coastal-land-is-sinking-doubling-the-potential-damage-of-rising-seas.html">[CNBC] Coastal land is sinking, doubling the potential damage from rising seas — here’s why</a></p><p><a href="https://www.wsj.com/articles/small-business-bankruptcies-surge-ahead-of-potential-law-change-e0c81dbb?mod=latest_headlines">[WSJ] Small-Business Bankruptcies Surge Ahead of Potential Law Change</a></p>Doug Nolandhttp://www.blogger.com/profile/16205512922521957121noreply@blogger.comtag:blogger.com,1999:blog-8372678976953624833.post-281971537043880072024-03-12T11:15:00.000-07:002024-03-12T11:19:16.325-07:00Tuesday Afternoon Links<p><a href="https://www.reuters.com/markets/us/sp-500-nasdaq-futures-edge-higher-ahead-key-inflation-test-2024-03-12/">[Reuters] Nasdaq leads Wall St up as traders hold rate-cut bets after CPI data</a></p><p><a href="https://www.reuters.com/markets/us/traders-keep-bets-june-first-fed-rate-cut-after-inflation-data-2024-03-12/">[Reuters] Fed seen on hold until June, with rate-cut pace in focus</a></p><p><a href="https://ca.finance.yahoo.com/news/wall-street-sees-risks-later-165749277.html">[Yahoo/Bloomberg] Wall Street Sees Risks of Later Start Date for Fed’s QT Tapering</a></p><p><a href="https://www.cnbc.com/2024/03/12/heres-the-inflation-breakdown-for-february-2024-in-one-chart.html">[CNBC] Here’s the inflation breakdown for February 2024</a></p><p><a href="https://ca.finance.yahoo.com/news/gas-prices-drove-inflation-higher-last-month-143742255.html">[Yahoo Finance] Gas prices drove inflation higher last month</a></p><p><a href="https://www.reuters.com/markets/commodities/venezuela-rushes-mend-iran-relationship-us-sanctions-loom-2024-03-12/">[Reuters] Venezuela rushes to mend Iran relationship as US sanctions loom</a></p><p><a href="https://www.wsj.com/world/middle-east/israel-and-hezbollah-exchange-fire-as-tensions-flare-on-lebanon-border-5b3e3f2c?mod=latest_headlines">[WSJ] Israel and Hezbollah Exchange Fire as Tensions Flare on Lebanon Border</a></p><p><a href="https://www.ft.com/content/46ca8249-8b81-4f25-a852-4bf9f9852085">[FT] US inflation rise to 3.2% highlights ‘last mile’ challenge for Federal Reserve</a></p><p><a href="https://www.ft.com/content/6ba7c6a4-1f2e-484a-8d02-b9eee167dc4e">[FT] Israel strikes targets deep inside Lebanon as cross-border fire escalates</a></p><p><a href="https://www.ft.com/content/4e2d5bb7-e4d5-4b98-b1a8-895c0d493b07">[FT] Shipbuilding: the new battleground in the US-China trade war</a></p>Doug Nolandhttp://www.blogger.com/profile/16205512922521957121noreply@blogger.comtag:blogger.com,1999:blog-8372678976953624833.post-8399374560488448832024-03-11T21:36:00.000-07:002024-03-12T06:25:02.888-07:00Tuesday's News LInks<p><a href="https://ca.finance.yahoo.com/news/stock-market-today-sp-500-nasdaq-futures-march-higher-after-cpi-surprise-124611660.html">[Yahoo Finance] Stock market today: S&P 500, Nasdaq march higher after CPI surprise</a></p><p><a href="https://ca.finance.yahoo.com/news/oil-steadies-market-waits-opec-232800690.html">[Yahoo/Bloomberg] Oil Steadies Before OPEC Monthly Report and US Inflation Data</a></p><p><a href="https://www.reuters.com/world/middle-east/yemens-houthis-target-us-ship-pinocchio-red-sea-2024-03-12/">[Reuters] Houthi missiles fired at ship in Red Sea, U.S. military says</a></p><p><a href="https://apnews.com/article/inflation-prices-rates-economy-biden-federal-reserve-4ac316b6a435ef44c370ce7686da67c0">[AP] US inflation up again in February in latest sign that price pressures remain elevated</a></p><p><a href="https://www.cnbc.com/2024/03/12/cpi-inflation-report-february-2024-.html">[CNBC] Consumer prices rose 0.4% in February and 3.2% from a year ago</a></p><p><a href="https://www.reuters.com/markets/us/us-small-business-optimism-falls-lowest-9-months-nfib-says-2024-03-12/#:~:text=NEW%20YORK%2C%20March%2012%20(Reuters,February%20from%2089.9%20in%20January.">[Reuters] US small business optimism falls to lowest in 9 months, NFIB says</a></p><p><a href="https://www.cnbc.com/2024/03/12/consumer-spending-rebounded-in-february-according-to-the-cnbc/nrf-retail-monitor.html">[CNBC] Consumer spending rebounded in February, according to the CNBC/NRF Retail Monitor</a></p><p><a href="https://www.reuters.com/markets/us/jpmorgans-dimon-urges-us-fed-wait-past-june-before-cutting-rates-2024-03-11/">[Reuters] JPMorgan's Dimon urges US Fed to wait past June before cutting rates</a></p><p><a href="https://www.reuters.com/world/us/us-spy-agencies-say-country-faces-increasingly-fragile-world-order-2024-03-11/">[Reuters] United States faces 'increasingly fragile world order,' spy chiefs say</a></p><p><a href="https://www.yahoo.com/news/surging-gasoline-prices-add-inflation-021939727.html">[Yahoo/Bloomberg] Surging Gasoline Prices Add Inflation Risk in US Election Year</a></p><p><a href="https://www.reuters.com/markets/us/hedge-flow-hedge-funds-ramp-up-leverage-near-record-highs-juice-returns-2024-03-12/">[Reuters] Hedge funds ramp up leverage to near record highs to juice returns</a></p><p><a href="https://www.reuters.com/business/finance/goldman-sachs-seeks-expand-private-credit-portfolio-300-billion-five-years-2024-03-12/">[Reuters] Exclusive: Goldman Sachs seeks to expand private credit portfolio to $300 billion in five years</a></p><p><a href="https://www.reuters.com/world/middle-east/us-british-forces-strike-houthi-targets-yemen-houthi-outlet-says-2024-03-11/">[Reuters] US-British forces strike Houthi targets, killing 11, Yemen says</a></p><p><a href="https://ca.finance.yahoo.com/news/china-vanke-debt-swap-talks-094108985.html">[Yahoo/Bloomberg] China Vanke in Debt Swap Talks With Banks to Stave Off Default</a></p><p><a href="https://ca.finance.yahoo.com/news/china-asks-banks-limit-backing-070919767.html">[Yahoo/Bloomberg] China Asks Some Banks to Limit Backing for Offshore LGFV Bonds</a></p><p><a href="https://www.reuters.com/business/chinese-premier-li-skip-meeting-with-global-ceos-key-business-summit-2024-03-12/">[Reuters] Exclusive: Chinese Premier Li to skip meeting with global CEOs at key business summit</a></p><p><a href="https://ca.finance.yahoo.com/news/boj-considering-march-hike-outcome-060852324.html">[Yahoo/Bloomberg] BOJ Considering March Hike With Outcome Too Close to Call, Sources Say</a></p><p><a href="https://ca.finance.yahoo.com/news/boj-ueda-reiterates-economy-recovering-030517836.html">[Yahoo/Bloomberg] BOJ’s Ueda Reiterates Economy Recovering Gradually Ahead of Meet</a></p><p><a href="https://www.reuters.com/world/europe/ukraine-launches-drones-oryol-fuel-facility-other-regions-russia-says-2024-03-12/">[Reuters] Ukraine pounds targets in Russia, key refinery seriously damaged</a></p><p><a href="https://ca.finance.yahoo.com/news/ukraine-drone-strike-halts-unit-082334727.html">[Yahoo/Bloomberg] Russia Battles Wave of Attacks by Ukrainian Drones, Rebel Troops</a></p><p><a href="https://www.bloomberg.com/news/articles/2024-03-12/hezbollah-fires-wave-of-missiles-at-israel-in-escalating-battle?sref=eo0IIyEe">[Bloomberg] Hezbollah Fires Wave of Missiles at Israel in Escalating Battle</a></p><p><a href="https://www.nytimes.com/2024/03/12/business/insurance-inflation.html">[NYT] Insurance Costs Are Pushing Up Overall Inflation</a></p><p><a href="https://www.nytimes.com/2024/03/12/business/china-exports-backlash.html">[NYT] China’s Exports Are Surging. Get Ready for the Global Backlash.</a></p><p><a href="https://www.ft.com/content/96b621f7-90d6-457e-898a-1c04e2902ceb">[FT] Gold’s mystery rally baffles analysts</a></p><p><a href="https://www.ft.com/content/30bfc73b-55aa-4a60-9440-11b22428e927">[FT] Risks grow for investors as a new economic framework emerges</a></p><p><a href="https://www.ft.com/content/e2cfc041-1eef-4a2b-95ba-050e32ba64a5">[FT] Chinese developer Vanke in spotlight after Moody’s downgrade</a></p><p><a href="https://www.ft.com/content/b00fc9dc-5dcb-4962-a24a-e1529fa191a9">[FT] Emerging market ETFs chalk up new record inflows in February</a></p>Doug Nolandhttp://www.blogger.com/profile/16205512922521957121noreply@blogger.comtag:blogger.com,1999:blog-8372678976953624833.post-60326215947235068062024-03-11T15:06:00.000-07:002024-03-11T15:06:51.908-07:00Monday Evening Links<p><a href="https://ca.finance.yahoo.com/news/asian-stocks-fall-us-cpi-222707881.html">[Yahoo/Bloomberg] Stock Rally Stalls in Countdown to Inflation Data: Markets Wrap</a></p><p><a href="https://ca.finance.yahoo.com/news/oil-holds-decline-investors-look-232542128.html">[Yahoo/Bloomberg] Oil holds steady as investors look ahead to US inflation figures</a></p><p><a href="https://www.reuters.com/world/middle-east/lebanons-hezbollah-says-stages-multi-drone-strike-israeli-outpost-golan-heights-2024-03-11/">[Reuters] Hezbollah says it stages drone strike on Israeli outpost in Golan Heights</a></p><p><a href="https://ca.finance.yahoo.com/news/bond-traders-eye-key-us-190000296.html">[Bloomberg] Bond Traders Eye Key Inflation Data to Plan Next Bets</a></p><p><a href="https://ca.finance.yahoo.com/news/nvidia-etf-delivers-double-gains-203219124.html">[Yahoo/Bloomberg] Nvidia ETF That Delivers Double Gains Sees Record Flows</a></p><p><a href="https://www.reuters.com/world/us/us-spy-agencies-say-country-faces-increasingly-fragile-world-order-2024-03-11/">[Reuters] United States faces 'increasingly fragile world order,' spy chiefs say </a></p><p><a href="https://www.reuters.com/world/russia-iran-china-hold-warship-drills-gulf-oman-2024-03-11/">[Reuters] Russia, Iran and China to hold warship drills in Gulf of Oman</a></p><p><a href="https://www.ft.com/content/9db7a8ff-2d45-41c7-8604-164ad2a3c46c">[FT] Global markets in record-breaking start to year</a></p>Doug Nolandhttp://www.blogger.com/profile/16205512922521957121noreply@blogger.comtag:blogger.com,1999:blog-8372678976953624833.post-7870751727833361702024-03-11T10:58:00.000-07:002024-03-11T10:58:23.524-07:00Monday Afternoon Links<p><a href="https://www.reuters.com/markets/us/futures-dip-run-up-inflation-data-2024-03-11/">[Reuters] Wall St eases as investors await inflation data</a></p><p><a href="https://ca.finance.yahoo.com/news/stock-market-magazine-cover-curse-165228292.html">[Yahoo/Bloomberg] Stock Market’s Magazine Cover Curse In Play as Media Buys Rally</a></p><p><a href="https://www.cnbc.com/2024/03/11/long-term-inflation-expectations-rise-spelling-possible-trouble-for-the-fed-survey-shows.html">[CNBC] Long-term inflation expectations rise, spelling possible trouble for the Fed, survey shows</a></p><p><a href="https://www.ft.com/content/e1ce2ba6-89e3-4132-8061-02120cf8165d">[FT] Bair: It’s time to rethink the FDIC approach to bank rescues</a></p>Doug Nolandhttp://www.blogger.com/profile/16205512922521957121noreply@blogger.comtag:blogger.com,1999:blog-8372678976953624833.post-44099462069845720952024-03-10T21:34:00.000-07:002024-03-11T05:53:20.808-07:00Monday's News Links<p><a href="https://ca.finance.yahoo.com/news/asian-stocks-fall-us-cpi-222707881.html">[Yahoo/Bloomberg] Stocks Slip as Countdown to Inflation Begins: Markets Wrap</a></p><p><a href="https://ca.finance.yahoo.com/news/gold-pushes-toward-record-test-010458519.html">[Yahoo/Bloomberg] Gold Steadies Near Record High as US Inflation Data Looms</a></p><p><a href="https://ca.finance.yahoo.com/news/nikkei-tumbles-most-yen-rise-025600674.html">[Yahoo/Bloomberg] Japanese Stocks Drop Most Since October as Exporters Fall on Yen</a></p><p><a href="https://ca.finance.yahoo.com/news/oil-holds-decline-investors-look-232542128.html">[Yahoo/Bloomberg] Oil Little Changed as Investors Look Ahead to US Inflation Print</a></p><p><a href="https://ca.finance.yahoo.com/news/sell-us-treasuries-excessive-bond-024044735.html">[Yahoo/Bloomberg] Sell US Treasuries After ‘Excessive’ Bond Rally, Barclays Says</a></p><p><a href="https://www.reuters.com/markets/us/emergency-fed-bank-effort-ends-lending-eyes-turn-discount-window-2024-03-11/">[Reuters] Emergency Fed bank effort ends lending, as eyes turn to discount window</a></p><p><a href="https://www.nbcnews.com/business/rcna141718">[NBC] 'Buy now, pay later' goes from niche to normal as young people use it for daily essentials</a></p><p><a href="https://www.reuters.com/business/chinese-regulators-ask-large-banks-step-up-support-vanke-sources-say-2024-03-11/">[Reuters] Exclusive: Chinese regulators ask large banks to step up support for Vanke, sources say</a></p><p><a href="https://ca.finance.yahoo.com/news/banks-balk-china-vanke-loan-101218112.html">[Yahoo/Bloomberg] Banks Balk at China Vanke Loan Terms in Hurdle for State Support</a></p><p><a href="https://apnews.com/article/china-congress-economy-jinping-beijing-5f80fc62081cb8bd06efc74fd4810972">[AP] China’s congress ends with a show of unity behind Xi’s vision for national greatness</a></p><p><a href="https://www.cnbc.com/2024/03/11/chinas-housing-minister-property-developers-must-go-bankrupt-if-needed.html">[CNBC] China’s housing minister says real estate developers must go bankrupt if necessary</a></p><p><a href="https://ca.finance.yahoo.com/news/world-negative-interest-rate-experiment-033000249.html">[Yahoo/Bloomberg] World’s Negative Interest Rate Experiment Nears Its End in Japan</a></p><p><a href="https://www.reuters.com/markets/asia/south-korea-watchdog-finds-wrongdoings-sales-china-equity-derivatives-2024-03-11/">[Reuters] South Korea watchdog finds wrongdoings in sales of China equity derivatives</a></p><p><a href="https://www.reuters.com/world/asia-pacific/china-trying-normalise-military-drills-near-taiwan-islands-top-security-official-2024-03-11/">[Reuters] China trying to 'normalise' military drills near Taiwan, island's top security official says</a></p><p><a href="https://www.wsj.com/personal-finance/retirement/more-americans-are-treating-their-401-k-s-like-cash-machines-deaa3f8f?mod=latest_headlines">[WSJ] More Americans Are Treating Their 401(k)s Like Cash Machines</a></p><p><a href="https://www.wsj.com/world/china/at-chinas-great-hall-of-the-people-whats-unsaid-speaks-volumes-dcc7c8e9?mod=latest_headlines">[WSJ] At China’s Great Leadership Gathering, What’s Unsaid Speaks Volumes</a></p><p><a href="https://www.wsj.com/finance/stocks/eighty-percent-of-the-worlds-stock-options-arent-traded-where-you-think-35a46ddc?mod=latest_headlines">[WSJ] Eighty Percent of the World’s Stock Options Aren’t Traded Where You Think</a></p><p><a href="https://www.ft.com/content/add7d18c-cf64-414c-a54a-7316a1830f9a">[FT] How high will borrowing costs go once Bank of Japan ditches negative rates?</a></p><p><a href="https://www.ft.com/content/e33b0bcb-3ee4-4e11-9c42-f78193f90e04">[FT] Dealmaking slowdown leaves private equity with record unsold assets</a></p><p><a href="https://www.ft.com/content/6cd312b9-0cca-476c-8ca7-7f7ee44afd33">[FT] Taiwan’s perilous path in a distracted world</a></p>Doug Nolandhttp://www.blogger.com/profile/16205512922521957121noreply@blogger.comtag:blogger.com,1999:blog-8372678976953624833.post-84971646738121240912024-03-10T16:07:00.000-07:002024-03-10T16:09:08.867-07:00Sunday Evening Links<p><a href="https://www.cnbc.com/2024/03/10/stock-market-today-live-updates.html">[CNBC] Stock futures fall slightly after Dow’s worst week since October: Live updates</a></p><p><a href="https://ca.finance.yahoo.com/news/asian-stocks-fall-us-cpi-222707881.html">[Yahoo/Bloomberg] Asian Stocks to Fall as US CPI Shifts Into Focus: Markets Wrap </a></p><p><a href="https://ca.finance.yahoo.com/news/bond-traders-eye-key-us-190000296.html">[Yahoo/Bloomberg] Bond Traders Eye Key US Inflation Report to Game Out Next Bets</a></p><p><a href="https://ca.finance.yahoo.com/news/one-most-infamous-trades-wall-200026476.html">[Yahoo/Bloomberg] One of the Most Infamous Trades on Wall Street Is Roaring Back</a></p><p><a href="https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-pix-2024-03-10/">[Reuters] Morning Bid: Are China's inflation, capital flows tides turning?</a></p><p><a href="https://ca.finance.yahoo.com/news/us-key-philippines-plan-tap-210000525.html">[Yahoo/Bloomberg] US Key to Philippines’ Plan to Tap Oil, Gas in South China Sea</a></p>Doug Nolandhttp://www.blogger.com/profile/16205512922521957121noreply@blogger.comtag:blogger.com,1999:blog-8372678976953624833.post-68455327612565784462024-03-09T21:48:00.000-08:002024-03-10T07:25:02.545-07:00Sunday's News Links<p><a href="https://www.reuters.com/world/middle-east/yemens-houthis-say-they-targeted-bulk-carrier-number-us-war-destroyers-red-sea-2024-03-09/">[Reuters] US, UK, French military shoot down Houthi drones after attack on bulk carrier, destroyers</a></p><p><a href="https://www.reuters.com/world/china/china-says-overall-pressure-employment-yet-ease-2024-03-09/">[Reuters] China warns overall pressure on employment yet to ease</a></p><p><a href="https://ca.finance.yahoo.com/news/default-risk-fades-emerging-markets-120000074.html">[Yahoo/Bloomberg] Default Risk Fades in Emerging Markets as Riskiest Bonds Soar</a></p><p><a href="https://www.bloomberg.com/news/articles/2024-03-10/powell-says-fed-s-close-to-evidence-needed-on-inflation-to-cut-interest-rates?srnd=homepage-americas&sref=eo0IIyEe">[Bloomberg] Fed Officials to Signal Interest Rate Cuts Are Getting Closer</a></p><p><a href="https://www.nytimes.com/2024/03/10/business/silicon-valley-bank-one-year-regulations.html">[NYT] One Year After Bank Crisis, a Struggle Over What Needs to Change</a></p><p><a href="https://www.wsj.com/business/logistics/shipping-panama-red-sea-suez-canal-edc91172?mod=latest_headlines">[WSJ] Two Canals, Two Big Problems—One Global Shipping Mess</a></p><p><a href="https://www.wsj.com/business/hospitality/surge-pricing-is-coming-to-more-menus-near-you-66a245f3?mod=latest_headlines">[WSJ] Surge Pricing Is Coming to More Menus Near You</a></p><p><a href="https://www.ft.com/content/2ac5a4ad-8536-4a71-a8fc-c7269e94c5e5">[FT] China’s love affair with Apple and Tesla hits rocky patch</a></p><p><a href="https://www.ft.com/content/d91153fd-a1f0-425a-910b-722b1b104150">[FT] China’s indebted provinces meet state bankers to discuss debt relief</a></p>Doug Nolandhttp://www.blogger.com/profile/16205512922521957121noreply@blogger.comtag:blogger.com,1999:blog-8372678976953624833.post-59889088257087839282024-03-09T05:33:00.000-08:002024-03-09T05:41:58.033-08:00Saturday's News Links<p><a href="https://www.reuters.com/world/middle-east/yemens-houthis-say-they-targeted-bulk-carrier-number-us-war-destroyers-red-sea-2024-03-09/">[Reuters] Houthis target bulk carrier, US destroyers in Red Sea</a></p><p><a href="https://ca.finance.yahoo.com/news/since-svb-tumult-nycb-focus-123000666.html">[Reuters] A Year Since SVB’s Tumult, NYCB Has Focus Back on Regional Banks</a></p><p><a href="https://ca.finance.yahoo.com/news/china-consumer-prices-rise-first-034612114.html">[Yahoo/Bloomberg] China’s Consumer Prices Rise for First Time Since August</a></p><p><a href="https://ca.finance.yahoo.com/news/boj-mulls-scrapping-yield-curve-002418348.html">[Yahoo/Bloomberg] BOJ Mulls Ending Yield Control to Focus on JGB Buying Size: Jiji</a></p><p><a href="https://www.bloomberg.com/news/articles/2024-03-09/gold-xau-price-latest-why-did-gold-hit-a-new-record?srnd=markets-vp&sref=eo0IIyEe">[Bloomberg] Chinese Buying Set the Stage for Gold’s Latest Record Run</a></p><p><a href="https://www.wsj.com/economy/jobs/how-americas-jobs-machine-keeps-humming-8f11911a?mod=latest_headlines">[WSJ] How America’s Jobs Machine Keeps Humming</a></p><p><a href="https://www.ft.com/content/71b6981d-5acb-4e9d-abae-d1efabea33f0">[FT] ‘No one is number 2’: Xi Jinping looms larger than ever over China</a></p>Doug Nolandhttp://www.blogger.com/profile/16205512922521957121noreply@blogger.comtag:blogger.com,1999:blog-8372678976953624833.post-42120077333566216752024-03-08T23:18:00.000-08:002024-03-09T08:12:05.333-08:00Weekly Commentary: Q4 2023 Z.1: Bubble ConfirmationThe Federal Reserve’s “Financial Accounts of the United States - Z.1” - where the rubber meets the road. Our quarterly read on systemic monetary (in)stability. Often concerning, but always refreshing: no Wall Street spin or BS – just 190 pages of data. And like booming securities markets and conspicuous speculative excess, Fed officials can ignore their own Credit and flows data at all our peril.<br /><br />Q4 Non-Financial Debt (NFD) expanded at a seasonally adjusted and annualized rate (SAAR) of $3.500 TN, down marginally from Q3’s (SAAR) $3.874 TN – but up significantly from Q4 2022’s (SAAR) $2.244 TN. This put 2023 NFD growth at $3.625 TN, down only somewhat from 2022’s $3.785 TN. Notably, 2023 NFD growth was 46% higher than pre-pandemic 2019 ($2.472 TN) – the strongest Credit expansion since 2007’s record $2.530 TN. <br /><br />At $73.808 TN, NFD has more than doubled (108%) since the end of 2008. NFD-to-GDP has inflated to 270%, up from 2007’s then record 233% - and the 191% to end the nineties. Since the end of 2007, Treasury Securities have inflated 324% - from $6.051 TN to $26.227 TN (to 94% of GDP from 41%). Total Treasury and Agency Securities ($38.187 TN) have inflated to 137% of GDP. Adding to “government finance Bubble” analysis, even after about 18 months of “quantitative tightening,” the Fed’s balance sheet ended 2023 $5.773 TN, or 607%, larger than Q4 2007.<br /><br />Q4 data confirm that government finance Bubble dynamics run unabated. The SAAR $2.878 TN increase in Federal Government borrowings accounted for over 80% of the period's NFD increase. For the year, Federal borrowings increased $2.620 TN, up from 2022’s $1.547 TN, and the largest gain since 2020’s $4.581 TN. <br /><br />Private-sector Credit growth slowed. Total Q4 Household Borrowings declined to SAAR $485 billion, down from Q3’s $622 billion and lower than Q4 ‘22’s $634 billion. Q4’s decline was despite Consumer Credit jumping to SAAR $166 billion from Q3’s $27 billion. Total Business borrowings slowed to SAAR $173 billion, from Q3’s $294 billion and Q4 ‘22’s $720 billion. <br /><br />Domestic Financial Sector borrowings recovered to SAAR $695 billion, after two straight quarters of contraction. <br /><br />Perhaps an inflection point for bank lending, the banking system came back to life during Q4. Bank (“Private Depository Institutions”) assets expanded nominal $401 billion (to a record $26.159 TN), fully reversing Q3 and Q2 declines. At nominal $151 billion, Bank Loans grew at the fastest pace since Q4 ’22 ($358bn). Mortgage loan growth slowed to $50 billion (3.0% annualized), while Consumer loans increased to $41 billion (6.0% annualized). Bank holdings of Debt Securities jumped $188 billion, or 12.8% annualized, to $6.058 TN – the largest increase since Q4 ’21. Treasury holdings rose $92 billion (to $1.521 TN), while Agency/MBS gained $103 billion (to $3.086 TN). <br /><br />On the Bank Liability side, Deposits (Checking and Savings) expanded $163 billion (to $20.312 TN), the first increase since Q1 ’22. This ended a $1.128 TN six-quarter deposit slide. Yet, Total Deposits inflated $4.779 TN, or 30.8%, over four years.<br /><br />The bigger Credit story continues to unfold in market-based finance. Broker/Dealer Assets expanded nominal $119 billion, or 10% annualized, during Q4 (to a record $4.876 TN) - the strongest growth since Q1’s $433 billion. This put 2023 growth at a notable $505 billion, or 11.5%.<br /><br />Broker Loans posted their first increase ($16bn) in seven quarters, while Treasury holdings rose $21 billion (to $269bn), Corporate Equities $32 billion (to $283bn), and Miscellaneous Assets $39 billion (to $1.739 TN). On the Liability side, Security Repurchase Agreements (“repo”) jumped $43 billion to $2.110 TN, the high back to Q3 2012. Repo Liabilities surged $484 billion, or 29.8%, during 2023. The repo market essentially financed the Broker/Dealer’s strong 2023 balance sheet growth.<br /><br />Overall, the Repo market contracted nominal $332 billion during Q4 to $6.253 TN, following virtually the same Q3 drop. This contraction is entirely explained by the rundown in the Fed’s “reverse repo” asset. Excluding the Fed’s position, the Repo market actually expanded another $140 billion during Q4 to a record $4.863 TN. Repo ex-Fed surged $1.189 TN, or 32.4%, during 2023. Curiously, the Rest of World (ROW) Repo Liability expanded another $113 billion during Q4 to a record $1.689 TN, with a notable ’23 gain of $528 billion, or 45.5%.<br /><br />Interesting developments also in the colossal Money Market Fund complex, today’s largest Repo market investor and key intermediary of speculative Credit. Money Fund (MF) Assets expanded another $215 billion, or 14% annualized, to a record $6.358 TN. Assets inflated $1.135 TN, or 21.7%, during 2023, with four-year growth of a blistering $2.355 TN, or 49.4%. Repo holdings declined $283 billion during Q4 to $2.666 TN, with a six-month drop of $567 billion. Meanwhile, Treasury holdings (T-bills) surged $502 billion, with six-month growth of $1.026 TN. Amazingly, MF boosted Treasury holdings by $1.205 TN, or 113%, during 2023. Money Funds also last year boosted Agency debt holdings by $128 billion, or 22.1%, to $798 billion. <br /><br />Led, of course, by Treasury Debt, Total Debt Securities expanded $1.065 TN during Q4 to a record $59.196 TN – the largest increase since Q4 2020 ($1.092 TN). Total Debt Securities inflated $3.313 TN during 2023, with 18-quarter growth of $13.451 TN, or 29.4%.<br /><br />Equities surged $7.901 TN during Q4 to $78.053 TN, second only to Q4 ‘21’s $80.061 TN, with 2023 growth of $13.350 TN, or 20.6%. Since the end of 2008, Equities have inflated $61.789 TN, or 380%. Equities-to-GDP ended 2023 at 279%, a record when excluding the pandemic period. This greatly exceeded previous cycle peaks 188% (Q4 2007) and 210% (Q1 2000).<br /><br />Total (Debt and Equities) Securities inflated $8.967 TN during Q4 to a record $137.249 TN, with growth lagging only year 2000’s Q2 ($12.327 TN) and Q4 ($9.994 TN) recoveries. Total Securities rose $16.663 TN, or 13.8%, over one year, and $40.736 TN, or 42.2%, in 18 quarters. For perspective, prior to the pandemic, the largest annual Total Securities increase was 2019’s $12.515 TN.<br /><br />Inflating securities markets continue to fuel historic Household balance sheet inflation. Household Assets jumped $5.009 TN during Q4 to a record $176.743 TN. Financial Asset holdings expanded $5.561 TN (to a record $118.832 TN), while Real Estate dipped $593 billion (to $49.073 TN). With Liabilities increasing $170 billion, Household Net Worth surged $4.839 TN to a record $156.214 TN. Net Worth inflated $11.587 TN in 2023. For perspective, previous Net Worth peak cycle inflation was 2004’s $6.862 TN and 1999’s $3.973 TN. <br /><br />Household Net Worth-to-GDP ended 2023 at 571%. This compares to previous cycle peaks 488% (Q1 2007) and 444% (Q1 2000).<br /><br />Household Total Equities (Equities and Mutual Funds) holdings jumped $3.291 TN during Q4 to $43.002 TN. Excluding the pandemic period, this was a record 154% of GDP (previous cycle peaks 104% (Q3 2007’s 104% and Q1 2000's 116%). Debt Securities holdings gained another $357 billion during Q4 to a record $5.671 TN. Debt Securities were up $1.236 TN, or 27.9%, during 2023, with three-year growth of $1.621 TN, or 40.0%.<br /><br />But it’s not just inflating securities prices fueling unprecedented Household Net Worth. Holdings of money-like instruments continue their unmatched ascent. Treasury and Agency holdings jumped another $202 billion during the quarter. Total Deposits gained $154 billion (largest gain in six quarters), while Money Funds deposits added another $117 billion. In total, Household holdings of Treasuries, Agencies, Deposits, and Money Funds (TAD&M) jumped $473 billion during the quarter to a record $21.579 TN, with a 2023 gain of $1.160 TN. TAD&M holdings inflated $5.881 TN, or 37.5%, during just the past four years.<br /><br />The Household Balance Sheet is a key Bubble manifestation, a major factor behind resilient consumer spending. The Rest of World (ROW) balance sheet is also a key facet of Bubble analysis.<br /><br />ROW holdings of U.S. Financial Assets inflated a quarterly record $4.089 TN during Q4 to a record $48.974 TN. Holdings surged an annual record $7.501 TN during 2023. Market gains drove a $1.452 TN Q4 rise in ROW Equities holdings. Debt Securities holdings jumped $863 billion during Q4 to a record $13.910 TN. For the quarter, Treasuries gained $413 billion (to $8.018 TN), Agencies $104 billion (to $1.429 TN), and Corporate Bonds $338 billion (to $4.165 TN). <br /><br />ROW has evolved into a prominent Repo market operator. ROW Repo liabilities jumped $113 billion during Q4 to a record $1.689 TN, with one-year growth of $528 billion, or 45.5%. Repo Assets gained $77 billion during Q4 to a record $1.759 TN, with 2023 growth of $343 billion, or 24.2%. It’s worth noting that ROW Repo operations also expanded rapidly during the mortgage finance Bubble period, where foreign financial institutions aggressively leveraged higher yielding mortgage securities and derivatives. <br /><br />Chair Powell: <i>“Interest rates right now are well into restrictive territory. They are well above neutral... We’ve said for some years that we would start restoring the federal funds rate to a more normal, almost neutral level. We’re far from neutral now.</i>”<br /><br /><i>March 8 – Bloomberg (Alexandra Harris): “Federal Reserve Bank of New York President John Williams said… the neutral rate of interest still ‘seems quite low.’ Speaking… at the London School of Economics, Williams said it’s not yet clear whether the neutral rate has moved up since the pandemic, though he said factors such as changing demographics and higher productivity may have an effect. He also emphasized the importance of using economic models to guide policy decisions… ‘Models are the way we communicate,’ Williams said. ‘If models are no good then the economists haven’t gotten it right.’”</i><br /><br />Economic data, including February’s 275,000 job gains, do not suggest a restrictive policy rate. Booming markets certainly don’t. And neither does the Fed’s Q4 Z.1 report. In fact, Z.1 data are consistent with market indicators. There is a dislocation within the Credit system that has generated self-reinforcing liquidity excess. I believe key sources of liquidity creation originate from a combination of domestic speculative leverage (i.e., repo borrowings intermediated through the money fund complex) coupled with foreign-sourced leveraged speculation (i.e., yen and off-shore “carry trades”).<br /><br />Perhaps the Fed focuses on reduced growth in household and corporate borrowings, while disregarding the paramount issue: ongoing booms in repo, money fund, broker/dealer, and ROW holdings. Resulting extraordinary liquidity excesses are fueling late-cycle speculative melt-up dynamics in equities, corporate Credit, crypto and the like. <br /><br />The ongoing “neutral rate” debate is a policy dead-end. I’ll try boiling down complex analysis to a relatively simple proposition: The so-called “neutral rate” these days oscillates with the unstable market environment. “Risk on” requires a relatively high rate; “risk off” a much lower rate. And as we’re witnessing, late-cycle blow-off excesses turn largely impervious to conventional policy “tightening.” The Fed is clearly averse to tightening market financial conditions, a policy bias that stokes speculation, leveraging, and other “Terminal Phase” excesses.<br /><br />A brief response to John Williams’ comment on economic models. Good luck modeling speculative market dynamics, financial innovation, and contemporary Credit more generally. And without an overarching emphasis on today’s dynamic financial system, econometric models will be deficient much of the time and of significant negative value at financial and economic critical junctures.<br /><br />It’s interesting. Powell and Fed officials seem hellbent on cutting rates, irrespective of booming markets, liquidity overabundance, economic resilience, and ongoing elevated system Credit expansion. Powell was all over the subject of financial conditions when conditions were tightening. He now completely disregards exceptionally loose market financial conditions. The Fed is preparing to back away from its so-called “restrictive” rate policy in anticipation of weaker growth dynamics. Yet resulting loose conditions, inflating asset prices, and booming corporate debt issuance further increase the likelihood of overheating. <br /><br /><i>March 8 – Bloomberg (James Crombie): “There’s no sign of a letup. US companies are selling bonds like there’s no tomorrow and booming demand will keep the floodgates open. The first quarter will likely be the biggest ever for high-grade US bond sales, with spreads close to two-year tights, tiny new issue concessions and all-in funding costs only looking more attractive as Treasury yields fall. This week’s high-grade supply handily beat expectations, as it has done for the last few weeks, and the outlook is for more of the same. Year-to-date supply of $440 billion, up 30% compared to last year, puts borrowers on track to crack the $510 billion first-quarter record set in 2020. Junk and structured credit issuance is also ramping up. And despite lousy high-grade returns, cash just keeps pouring in, pursuing all-in yields that still seem enticing.”</i><br /><br /><br /><div><span style="font-size: large;">For the Week:</span><br /><br />The S&P500 slipped 0.3% (up 7.4% y-t-d), and the Dow fell 0.9% (up 2.7%). The Utilities jumped 3.3% (up 0.2%). The Banks rose 3.0% (up 3.3%), and the Broker/Dealers added 1.9% (up 5.5%). The Transports dipped 0.7% (down 1.1%). The S&P 400 Midcaps gained 1.4% (up 6.1%), and the small cap Russell 2000 added 0.3% (up 2.7%). The Nasdaq100 fell 1.6% (up 7.1%). The Semiconductors gained 0.6% (up 18.7%). The Biotechs increased 0.2% (down 1.7%). With bullion surging $96, the HUI gold index rallied 8.5% (down 6.0%).<br /><br />Three-month Treasury bill rates ended the week at 5.225%. Two-year government yields declined six bps this week to 4.47% (up 22bps y-t-d). Five-year T-note yields dropped 11 bps to 4.05% (up 20bps). Ten-year Treasury yields fell 10 bps to 4.08% (up 20bps). Long bond yields declined seven bps to 4.25% (up 23bps). Benchmark Fannie Mae MBS yields sank 21 bps to 5.50% (up 23bps).<br /><br />Italian yields sank 31 bps to 3.58% (down 12bps y-t-d). Greek 10-year yields fell 21 bps to 3.27% (up 22bps). Spain's 10-year yields dropped 23 bps to 3.08% (up 9bps). German bund yields fell 15 bps to 2.27% (up 24bps). French yields dropped 18 bps to 2.72% (up 16bps). The French to German 10-year bond spread narrowed three to 45 bps. U.K. 10-year gilt yields fell 14 bps to 3.98% (up 44bps). U.K.'s FTSE equities index slipped 0.3% (down 1.0% y-t-d).<br /><br />Japan's Nikkei Equities Index dipped 0.6% (up 18.6% y-t-d). Japanese 10-year "JGB" yields increased two bps to 0.74% (up 12bps y-t-d). France's CAC40 gained 1.2% (up 6.4%). The German DAX equities index added 0.4% (up 6.3%). Spain's IBEX 35 equities index jumped 2.4% (up 2.0%). Italy's FTSE MIB index gained 1.2% (up 10.1%). EM equities were mixed. Brazil's Bovespa index fell 1.6% (down 5.3%), and Mexico's Bolsa index lost 1.1% (down 4.3%). South Korea's Kospi index rallied 1.4% (up 0.9%). India's Sensex equities index increased 0.5% (up 2.6%). China's Shanghai Exchange Index gained 0.6% (up 2.4%). Turkey's Borsa Istanbul National 100 index added 0.6% (up 22.6%). Russia's MICEX equities index rose 1.5% (up 7.0%).<br /><br />Federal Reserve Credit declined $38.4bn last week to $7.501 TN. Fed Credit was down $1.388 TN from the June 22nd, 2022, peak. Over the past 234 weeks, Fed Credit expanded $3.775 TN, or 101%. Fed Credit inflated $4.690 TN, or 167%, over the past 591 weeks. <br /><br />Total money market fund assets rose $18.7bn to a record $6.077 TN. Money funds were up $1.257 TN, or 26.1%, y-o-y.<br /><br />Total Commercial Paper declined $11.2bn to $1.266 TN. CP was up $88bn, or 7.4%, over the past year.<br /><br />Freddie Mac 30-year fixed mortgage rates fell six bps to 6.88% (up 17bps y-o-y). Fifteen-year rates declined four bps to 6.22% (up 13bps). Bankrate's survey of jumbo mortgage borrowing costs had 30-year fixed rates down 13 bps 7.19% (up 17bps).<br /><br /><span style="font-size: large;">Currency Watch:</span><br /><br />March 5 – Reuters (Summer Zhen and Samuel Shen): “Chinese money is pouring into funds invested in offshore assets at breakneck speed, butting up against outbound investment limits and complicating Beijing's efforts to revive domestic markets and stabilise the yuan. The rush to invest offshore reflects low confidence at home and is evident in sales of funds issued under the Qualified Domestic Institutional Investor (QDII) programme, a key outbound investment channel that allows Chinese to buy overseas securities under Beijing's strict capital controls. QDII fund units sold in January jumped 50% year-on-year to a record high…”<br /><br />For the week, the U.S. Dollar Index declined 1.1% to 102.71 (up 1.4% y-t-d). For the week on the upside, the Japanese yen increased 2.1%, the South African rand 2.0%, the British pound 1.6%, the Australian dollar 1.5%, the Mexican peso 1.2%, the New Zealand dollar 1.2%, the Swedish krona 1.1%, the Singapore dollar 1.0%, the Norwegian krone 1.0%, the euro 0.9%, the South Korean won 0.9%, the Swiss franc 0.7% and the Canadian dollar 0.6%. On the downside, the Brazilian real declined 0.6%. The Chinese (onshore) renminbi increased 0.13% versus the dollar (down 1.21% y-t-d).<br /><br /><span style="font-size: large;">Commodities Watch:</span><br /><br />March 7 – Bloomberg (Sybilla Gross): “China’s central bank added gold to its reserves for a 16th straight month in February, extending a long buying spree that’s helped to support the precious metal’s surge to a record high. Bullion held by the People’s Bank of China rose by about 390,000 troy ounces last month… That takes total holdings to 72.58 million troy ounces, equivalent to about 2,257 tons… Central banks bought 1,037 tons of gold last year, just shy of the all-time high of 2022, according to the World Gold Council. There’s a strong case for record buying by countries including China and Poland this year, the council said in January.”<br /><br />March 3 – Reuters (Maha El Dahan and Alex Lawler): “OPEC+ members led by Saudi Arabia and Russia agreed… to extend voluntary oil output cuts of 2.2 million barrels per day into the second quarter, giving extra support to the market amid concerns over global growth and rising output outside the group. Saudi Arabia… said it would extend its voluntary cut of 1 million barrels per day (bpd) through the end of June, leaving its output at around 9 million bpd.”<br /><br />The Bloomberg Commodities Index increased 0.8% (down 0.7% y-t-d). Spot Gold jumped 4.6% to $2,179 (up 5.6%). Silver surged 5.1% to $24.31 (up 2.2%). WTI crude declined $1.96, or 2.5%, to $78.01 (up 9%). Gasoline fell 3.3% (up 20%), and Natural Gas declined 1.6% to $1.81 (down 28%). Copper gained 0.8% (unchanged). Wheat sank 5.9% (down 16%), while Corn jumped 3.4% (down 10%). Bitcoin surged $6,300, or 10.1%, to $68,560 (up 61%).<br /><br /><span style="font-size: large;">Middle East War Watch:</span><br /><br />March 7 – Reuters (Emily Rose and Ari Rabinovitch): “Israel will push on with its offensive against Hamas, including into the southern Gaza city of Rafah, despite growing international pressure to stop, Prime Minister Benjamin Netanyahu said on Thursday… ‘There is international pressure and it's growing, but particularly when the international pressure rises, we must close ranks, we need to stand together against the attempts to stop the war,’ he said.”<br /><br />March 7 – Reuters (Nidal Al-Mughrabi): “Hamas on Thursday left Gaza ceasefire talks in Cairo where there was no sign of progress just days before the start of Ramadan, while the U.S. said the onus was on the Palestinian militant group to strike a deal on Israeli hostages. Israel and Hamas blamed each other for the lack of agreement after four days of talks mediated by Qatar and Egypt about a 40-day ceasefire amid fears violence could escalate during the Muslim fasting month.”<br /><br />March 5 – Reuters (James Mackenzie): “Israeli defence minister Yoav Gallant said… the continuing tension with Iran-backed Hezbollah at the border with Lebanon was moving the situation nearer to a military escalation. Israel and Hezbollah have been trading fire since the Palestinian group Hamas attacked Israel on Oct. 7, fuelling concern about the danger of all-out war… ‘We are committed to the diplomatic process, however Hezbollah’s aggression is bringing us closer to a critical point in the decision-making regarding our military activities in Lebanon,’ Gallant said…”<br /><br />March 7 – Associated Press (Jon Gambrell): “The first fatal attack by Yemen’s Houthi rebels on shipping threatens to further sever a crucial maritime artery for global trade and carries with it risks beyond those just at sea. Already, the White House is warning that there will be a response to Wednesday’s attack on the Barbados-flagged, Liberian-owned bulk carrier True Confidence in the Gulf of Aden. What that will look like remains unclear, but the U.S. has already launched round after round of airstrikes targeting the Houthis, a rebel group that has held Yemen’s capital since 2014, and more are likely on the way.”<br /><br />March 2 – Reuters (Nidal Al-Mughrabi and Idrees Ali): “The United States on Saturday carried out the first of what it said would be a series of humanitarian airdrops of food into Gaza, as aid agencies warned of a growing humanitarian disaster in the Palestinian enclave in the absence of a ceasefire deal. Three C-130 U.S. military planes delivered more than 38,000 meals into a territory where the United Nations says at least 576,000 people are one step away from famine conditions.”<br /><br />March 3 – Reuters (Mohamed Ghobari): “Yemen's Iran-backed Houthis vowed on Sunday to continue targeting British ships in the Gulf of Aden following the sinking of UK-owned vessel Rubymar. The U.S. military confirmed on Saturday that the UK-owned vessel Rubymar had sunk… ‘Yemen will continue to sink more British ships, and any repercussions or other damages will be added to Britain’s bill,’ Hussein al-Ezzi, deputy foreign minister in the Houthi-led government, said…”<br /><br />March 5 – Financial Times (Robert Wright): “When Yemen’s Houthi rebels attacked a ship carrying 21,000 tonnes of fertiliser from Saudi Arabia to Bulgaria last month, they had a simple justification: they said the Rubymar was a ‘British ship’. But the Rubymar, which sank on Saturday, flew the flag of Belize, was partly managed by a Beirut-based ship management company, was on a voyage organised by another Lebanese operator and had a mostly Syrian crew. Its only clear link to the UK is that maritime databases give a flat in Southampton, England… as the address for the ship’s owner. However, that owner is a company called Golden Adventure registered in the Marshall Islands in the Pacific.”<br /><br /><span style="font-size: large;">Ukraine War Watch:</span><br /><br />March 4 – Reuters (Andrew Osborn): “Dmitry Medvedev, deputy chairman of Russia’s Security Council and an ally of President Vladimir Putin, described Ukraine… as part of Russia and said what he called historical parts of Russia needed to ‘come home.’ In a bellicose presentation that suggested Russia's military goals in Ukraine are far-reaching, Medvedev… praised the Russian Empire and the Soviet Union and said Moscow would prosecute its ‘special military operation’ until the Ukrainian leadership capitulated. ‘One of Ukraine's former leaders said at some point that Ukraine is not Russia,’ Medvedev… told a youth forum… ‘That concept needs to disappear forever. Ukraine is definitely Russia,’ he said to applause. ‘Historic parts of the country need to come home.’”<br /><br />March 6 – Reuters: “A senior Russian military officer has warned that the conflict in Ukraine could escalate into a full-scale war in Europe and said the probability of Moscow's forces becoming involved in a new conflict is increasing ‘significantly.’ Colonel-General Vladimir Zarudnitsky, head of the Russian army's Military Academy of the General Staff, made the comments in an article for ‘Military Thought’, a defence ministry publication… ‘The possibility of an escalation of the conflict in Ukraine - from the expansion of participants in 'proxy forces' used for military confrontation with Russia to a large-scale war in Europe - cannot be ruled out… The main source of military threats to our state is the anti-Russian policy of the United States and its allies, who are conducting a new type of hybrid warfare in order to weaken Russia in every possible way, limit its sovereignty and destroy its territorial integrity.’”<br /><br />March 4 – Financial Times (Guy Chazan and Max Seddon): “Germany has rejected a claim by Moscow that it is planning attacks on Russian territory, calling it ‘absurd propaganda’. Russia made the claim after Kremlin-controlled media published a recording in which senior German air force personnel appeared to discuss how the country’s long-range Taurus missiles could be used by Kyiv against Russian forces… The intercept has caused a political storm in Germany, raising deep concern about the security of government communications. It has also reignited a row over whether Berlin should give Tauruses to Kyiv…”<br /><br /><span style="font-size: large;">Taiwan Watch:</span><br /><br />March 6 – Reuters (Yimou Lee): “China has stepped up grey-zone warfare against Taiwan, aiming to make the areas around the democratic island ‘saturated’ with balloons, drones and civilian boats, a Taiwan defence ministry report said… Taiwan… has complained in recent years that China has been using so-called grey-zone warfare, which wields irregular tactics to exhaust a foe without resorting to open combat. In a report sent to parliament, a copy of which was reviewed by Reuters, the ministry said Beijing has launched ‘multi-front saturated grey-zone’ tactics to harass Taiwan, including increased patrols of ships and planes.”<br /><br /><span style="font-size: large;">Market Instability Watch:</span><br /><br />March 3 – Financial Times (Kate Duguid, Nikou Asgari and Costas Mourselas): “One of Bill Clinton’s top advisers memorably said that he would like to be reincarnated as the bond market ‘because you can intimidate everyone’. But in recent years, the most powerful fixed-income market of all has been scaring its own regulators. The $26.5tn US Treasury market is the biggest and most liquid in the world and Treasury securities are held by investors and central banks across the globe. The market is the mechanism by which the Federal Reserve executes monetary policy and through which the US government borrows. Yields on Treasuries are the risk-free rate against which assets around the world are priced. But growing problems could threaten the asset’s supremacy in the financial world. On three occasions in the past decade, crises have precipitated a dysfunction in the market. The 2019 repo crisis and the March 2020 market meltdown required emergency intervention from the Federal Reserve and the New York Fed.” <br /><br /><span style="font-size: large;">Bank Watch:</span><br /><br />March 6 – Reuters (Niket Nishant, Manya Saini and Anirban Sen): “New York Community Bancorp said… it had raised $1 billion from investors including former U.S. Treasury Secretary Steven Mnuchin's Liberty Strategic Capital and named a former Comptroller of the Currency its new CEO. Investment firms Hudson Bay Capital, Reverence Capital Partners, Citadel Global Equities, other institutional investors and certain members of the bank's management also participated in the equity investment, according to NYCB. The bank's stock had a rollercoaster session, falling 45% prior to the announcement, bouncing 30% higher after finally closed 7.4% higher.”<br /><br />March 7 – New York Times (Andrew Ross Sorkin, Ravi Mattu, Bernhard Warner, Sarah Kessler, Michael J. de la Merced, Lauren Hirsch, Ephrat Livni and Benjamin Mullin): “For months, Wall Street C.E.O.s have been complaining bitterly and lobbying against the prospect of higher capital requirements, which would require them to keep more money on hand and would lower their profits. It appears they have scored a big win. Jay Powell dropped the bombshell in his testimony before the House... Markets were still digesting the Fed chair’s go-slow comments on interest rate cuts when he signaled that proposed new rules to force lenders to beef up their books would be scaled back, or reworked. ‘I do expect that there will be broad and material changes to the proposal,’ he said. The capital rules, known as the ‘Basel III Endgame,’ would apply to the largest banks. They would have to set aside a bigger emergency cushion to soak up losses stemming from shocks like the bank run last year that led to the collapse of Silicon Valley Bank and prompted a wider crisis.”<br /><br />March 7 – Financial Times (Joshua Franklin, Stephen Gandel and Brooke Masters): “The number of problem banks in the US has jumped 18%, regulators warned, as New York Community Bank was stabilised by a $1bn capital raise led by former US Treasury secretary Steven Mnuchin. Twelve months after the failure of Silicon Valley Bank shook the regional banking sector, NYCB’s recent struggles have underscored the continuing fragility at some US lenders. The Federal Deposit Insurance Corporation… said the number of weak US banks had risen by eight to 52 in the final three months of 2023, the biggest jump since the demise of SVB.”<br /><br />March 4 – Wall Street Journal (Telis Demos): “Recent regional banking crises have revived debates about the size of banks. Larger banks have been more insulated from some of the pressures hitting their smaller peers, such as deposit outflows and heavy concentrations in commercial-real estate lending. This suggests that letting banks get bigger might be a pathway to stability—though one that critics would charge shifts the burden to taxpayers to backstop more ‘too big to fail’ behemoths, or would concentrate banking in a way that hurts customers. Another problem: Getting to bigger banks means growing smaller- and medium-size banks. And what we are seeing is that this process can be fraught with risk.”<br /><br />March 5 – Bloomberg (Tommy Wilkes): “Major European banks have been cutting their lending to commercial property and have half the exposure of their U.S. peers, making U.S. lenders more vulnerable as office prices plunge further, Morgan Stanley said… Commercial real estate (CRE) markets are in the grip of the biggest downturn since the 2008-9 financial crisis as higher borrowing costs and a spike in vacancy rates driven by more people working from home hit demand for office space. Morgan Stanley analysts said in a research note that regional U.S. banks looked most exposed, alongside German regional lenders - which unlike bigger European banks had been increasing their exposure.”<br /><br />March 7 – Reuters (Tom Sims): “The credit rating agency Moody's said… it was downgrading its outlook for the banking sector in a number of European countries as weak economies erode profits. It changed the outlook to negative from stable for the banking sectors of Germany, Britain, France, Belgium, the Netherlands and Sweden. Rising losses for unpaid loans and higher funding costs will chip away at profits, Moody's said.”<br /><br /><span style="font-size: large;">Global Credit Bubble Watch:</span><br /><br />March 6 – Bloomberg (Caleb Mutua): “A healthy pipeline of potential deals to fund mergers and acquisitions and a primary market that’s looking ‘quite attractive’ for borrowers will fuel an already record-setting issuance spree, contrary to expectations that sales will slow in March, according to JPMorgan… Issuance in the US investment-grade market is up nearly 40% to $429.2 billion this year through Tuesday after a record January and February…”<br /><br />March 8 – Bloomberg (Olivia Raimonde and Ronan Martin): “The most punishing interest-rate hikes since the 1980s… Yet another US lender hitting trouble barely a year after debt markets were upended by the collapse of one of the world's biggest banks. Credit investors have shrugged all of this off and are acting like the go-go days of the easy money era are back again. Driven by a wall of new cash and a belief that the US Federal Reserve has served up a soft economic landing, normally sober debt investors are joining the ‘everything boom’ that’s sent stocks and Bitcoin to giddy heights… In credit, a risk-taking ebullience has taken hold. The lowest-rated traded company debt is outgunning safer assets: Spreads between junk bond yields and investment-grade counterparts are tight. Loan prices are high as demand soars. Negative-yielding bonds are back. And whether Fed Chair Jay Powell wants it or not, it’s getting easier for companies of all stripes to snag funding.”<br /><br />March 4 – Bloomberg (Lisa Lee): “Wall Street bankers looking to raise fresh financing for multi-billion dollar buyouts are getting a boost from the record start to the year from a critical part of the leveraged loan universe. Sales of collateralized loan obligations stand at $32.7 billion in the US so far, surpassing the previous high of $24.6 billion in 2021, according to Bank of America... In Europe, CLO issuance has also reached a historically fast pace, with $5.5bn… The surge in demand, following a dismal 2023, should buoy banks competing with private credit to underwrite the trickle of merger and acquisition financing deals. That’s because slices of the leveraged loans they sell to support those buyouts also get packaged into the CLOs.”<br /><br />March 4 – Reuters (Matt Tracy): “Defaults among U.S. corporate junk debt issuers reached a post-pandemic high in February, JPMorgan said... Nine junk-rated borrowers either filed for Chapter 11 bankruptcy or missed their interest payments on a total of $5.97 billion in loans and bonds last month, JPMorgan noted. Three other companies opted for a distressed exchange on a total $3.96 billion in loans and bonds, the report added… Last month's $9.9 billion in combined defaults and distressed exchanges surpassed 2023's monthly average of $7.2 billion, JPMorgan said. It was the highest combined volume of the two since $16.9 billion posted in April 2023.”<br /><br />March 5 – Bloomberg (John Sage): “Private credit’s ‘golden era’ may face strain amid a resurgence in the broadly syndicated loan market, as increased competition drives down returns, according to a report from Moody’s... As banks compete harder to win big deals, recent private credit loans have priced at some of the tightest spreads on record… ‘As rate hikes level and competition escalates, this will put pressure on private credit returns, including the generous illiquidity premiums that direct lenders wield over syndicated lenders in public markets. All of this will drive greater convergence in terms and pricing between banks and nonbanks,’ analysts led by Christina Padgett wrote…”<br /><br />March 6 – Bloomberg (Amanda Albright and Danielle Moran): “Harvard University — armed with a AAA credit rating and $50 billion endowment — sold $750 million in taxable bonds this week as buyers shrugged off recent controversies swirling around the school. The debt priced at 47 bps above similar-maturity Treasuries, compared to earlier price talk of 60 bps. That’s one of the tightest spread of any 11-year investment-grade bond dating back to at least 2009…”<br /><br /><span style="font-size: large;">AI Bubble Watch:</span><br /><br />March 7 – Bloomberg (Jan-Patrick Barnert): “Options trading in semiconductor stocks is exploding as investors bet on the hottest thing in equity markets these days: artificial intelligence. Daily average notional volume in single stock puts and calls for members of the Philadelphia Semiconductor Index exceeded $145 billion in February. That’s about double the average at the end of 2023 and seven times higher than a year earlier. Nvidia Corp., the chip maker at the heart of the AI bull market, accounted for almost four-fifths of the trades. Last year, Nvidia’s market value soared by almost 240%. It’s up 85% in 2024, pulling the semiconductor index up by more than 23%.”<br /><br />March 8 – Reuters (Alun John): “Investors dumped technology stocks at the fastest rate on record and continued to pour money into investment grade bonds and cash equivalents in the week to Wednesday, Bank of America said… Tech stocks saw $4.4 billion of outflows in the latest week, their ‘largest outflow ever’ and the first outflow in nine weeks, BofA said…”<br /><br /><span style="font-size: large;">Bubble and Mania Watch:</span><br /><br />March 5 – Bloomberg (Alexandra Semenova): “The sharp rally in US stocks this year has left strategists at JPMorgan… and Goldman Sachs… divided about whether a market bubble is forming. To JPMorgan’s chief market strategist Marko Kolanovic, the dramatic rally in US equities and Bitcoin’s quick surge above the $60,000 mark signal yes. He sees those advances as indicative of accumulating froth in the market… He joins in a chorus of rapidly piling up warnings from Wall Street that are hearkening back to the dot-com boom of the late-1990s, or the post-pandemic mania of 2021, when stock prices quickly ballooned and then burst. Meanwhile, David Kostin at Goldman Sachs is among those who thinks the risk-on mood is warranted, arguing Big Tech’s lofty valuations are supported by fundamentals.”<br /><br />March 7 – Reuters (Kanchana Chakravarty, Roshan Abraham and Sruthi Shankar): “Goldman Sachs expects U.S. share buybacks to exceed $1 trillion for the first time in 2025, driven by strong earnings growth from technology companies and looser financial conditions as the Federal Reserve looks to cut interest rates. The Wall Street bank… said it expects 16% growth in share repurchases from S&P 500, opens new tab companies to $1.08 trillion in 2025, following a 13% rise to $925 billion in 2024.”<br /><br />March 5 – Wall Street Journal (Ben Otto): “Shipments by Tesla and other electric vehicle makers tumbled in China in February… The U.S. electric vehicle maker shipped 60,365 China-made vehicles during the month, its lowest monthly reading since late 2022… BYD, the Chinese automaker that overtook Tesla as the world’s top seller of electric vehicles last quarter, saw its sales fall to 121,748 vehicles in February from 201,493 a month earlier… Across the industry, total EV sales fell 9% on year—and 34% on-month—to about 450,000 units in February, the CPCA said.”<br /><br /><span style="font-size: large;">U.S./Russia/China/Europe Watch:</span><br /><br />March 5 – Reuters (Yew Lun Tian and Laurie Chen): “China will boost its defence spending by 7.2% this year, fuelling a military budget that has more than doubled under President Xi Jinping's 11 years in office as Beijing hardens its stance on Taiwan… China also officially adopted tougher language against Taiwan as it released the budget figures, dropping the mention of ‘peaceful reunification’ in a government report delivered by Premier Li Qiang at the opening of the National People's Congress (NPC), China's rubber-stamp parliament…”<br /><br />March 7 – Wall Street Journal (Brian Spegele and Austin Ramzy): “China’s foreign minister painted the U.S. as a paranoid superpower and criticized Europe’s policy toward Beijing as increasingly muddled, comments that laid bare how deep distrust persists between China and the West despite a surge of diplomacy to stabilize ties… Foreign Minister Wang Yi also warned of the possible escalation in the war between Russia and Ukraine, celebrated the close ties between Beijing and Moscow and echoed recent comments by Russian President Vladimir Putin about the risk of a protracted conflict. Wang… saved his sharpest barbs for the U.S. After acknowledging ‘some progress’ in improving U.S.-China ties since the November summit between President Biden and Chinese leader Xi Jinping in California, Wang said the U.S. was still failing to keep its promises.”<br /><br />March 4 – Wall Street Journal (Clarence Leong and Liza Lin): “Two years after the invasion of Ukraine, drones and U.S.-made computer chips are increasingly flowing to Russia from China through Central Asian trade routes, showing the difficulty of strangling supplies to Moscow’s war effort. Trade routes snaking through former Soviet republics Kazakhstan and Kyrgyzstan are among the many paths into Russia for so-called dual-use goods… Despite their efforts, Central Asia is a growing pipeline for Russia, made possible by thousands of miles of open borders, opaque trade practices and opportunistic middlemen. The goods often originate in China, where they are manufactured in some cases by major U.S. companies, which say the items are being imported by Russia without their permission.”<br /><br />March 5 – Reuters: “Russia and China are considering putting a nuclear power plant on the moon from 2033-35, Yuri Borisov, the head of Russia's space agency Roscosmos said… Borisov, a former deputy defence minister, said that Russia and China had been jointly working on a lunar programme and that Moscow was able to contribute with its expertise on ‘nuclear space energy’. ‘Today we are seriously considering a project - somewhere at the turn of 2033-2035 - to deliver and install a power unit on the lunar surface together with our Chinese colleagues,’ Borisov said.”<br /><br /><span style="font-size: large;">De-globalization and Iron Curtain Watch:</span><br /><br />March 5 – Reuters (Yelin Mo and Brenda Goh): “Apple’s iPhone sales in China fell 24% year-on-year in the first six weeks of 2024, according to research firm Counterpoint, as the U.S. company faced increased competition from domestic rivals such as Huawei. The U.S. tech giant's chief competitor in China in premium smartphones, Huawei, saw unit sales rise by 64% in the period…”<br /><br />March 7 – Wall Street Journal (Liza Lin): “For American tech companies in China, the writing is on the wall. It’s also on paper, in Document 79. The 2022 Chinese government directive expands a drive that is muscling U.S. technology out of the country—an effort some refer to as ‘Delete A,’ for Delete America. Document 79 was so sensitive that high-ranking officials and executives were only shown the order and weren’t allowed to make copies, people familiar with the matter said. It requires state-owned companies in finance, energy and other sectors to replace foreign software in their IT systems by 2027.”<br /><br /><span style="font-size: large;">Inflation Watch:</span><br /><br />March 4 – Financial Times (Aiden Reiter): “Services price inflation is likely to remain stubbornly strong this year and could cause central banks to delay interest rate cuts, according to the Bank for International Settlements. Prices in the services sector, which is labour-intensive and therefore more sensitive to movements in wages, are likely to remain high across advanced and emerging economies for longer than expected due to tight labour markets… If services prices increased further, the ‘possible slowdown of disinflation could prompt monetary policy to remain tighter for longer’, the report added. Persistent growth in services inflation has proven to be an obstacle to addressing the ‘last mile’ of inflation, as central bankers inch closer to an overall rate of price growth where they could begin making cuts.”<br /><br />March 4 – Wall Street Journal (Heather Haddon and Ruth Simon): “A $16 bacon cheeseburger may not be enough to save your neighborhood bar and grill. Independent restaurants are on financial life support, owners say, squeezed between escalating payroll costs and diners’ dwindling tolerance for ever-higher checks. Wages for waitstaff, table bussers and line cooks will grow more expensive for many eateries this year, with 22 states in January raising the minimum wage for hourly workers… In January, 59% of small-business owners reported higher labor costs were their biggest source of inflation, according to a survey of more than 425 entrepreneurs conducted… by Vistage Worldwide…”<br /><br />March 3 – Wall Street Journal (Jason Douglas): “In the late 1990s and early 2000s, the U.S. and the global economy experienced a ‘China shock,’ a boom in imports of cheap Chinese-made goods that helped keep inflation low but at the cost of local manufacturing jobs. A sequel might be in the making as Beijing doubles down on exports to revive the country’s growth. Its factories are churning out more cars, machinery and consumer electronics than its domestic economy can absorb. Propped up by cheap, state-directed loans, Chinese companies are glutting foreign markets with products they can’t sell at home.”<br /><br /><span style="font-size: large;">Federal Reserve Watch:</span><br /><br />March 6 – Bloomberg (Denitsa Tsekova): “Ever since the Federal Reserve began its policy-tightening campaign, Jerome Powell has been happy to ignore one form of inflation: Rising asset prices. Now as the Fed chair gears up for his congressional testimony on Capitol Hill, Wall Street is starting to wonder just how long Powell’s hands-off approach can last against the backdrop of sizzling markets. With tech stocks hitting relentless records of late, a Goldman Sachs… measure of financial conditions has eased at one of the fastest clips in four decades. Ever-volatile Bitcoin touched new heights at one point Tuesday as the meme-coin crowd roars back to life. On economic growth, even Nouriel ‘Dr. Doom’ Roubini is sounding, well, bullish.”<br /><br />March 4 – Reuters (Howard Schneider): “The U.S. Federal Reserve is under no urgent pressure to cut interest rates given a ‘prospering’ economy and job market, Atlanta Fed President Raphael Bostic said in remarks that highlighted the risk inflation may get stuck above the central bank's 2% target or be sent even higher by ‘pent-up exuberance.’ Bostic said he still thinks it will likely be appropriate for the Fed to approve two quarter-point rate cuts by the end of this year. But he also said the Fed was walking a ‘fine line’ to be sure that current economic strength does not evolve into ‘froth’ and a new round of inflation.”<br /><br /><span style="font-size: large;">U.S. Bubble Watch:</span><br /><br />March 8 – Associated Press (Paul Wiseman): “America’s employers delivered another healthy month of hiring in February, adding a surprising 275,000 jobs and again showcasing the U.S. economy’s resilience in the face of high interest rates. Last month’s job growth marked an increase from a revised gain of 229,000 jobs in January. At the same time, the unemployment rate ticked up two-tenths of a point in February to 3.9%... And it marked the 25th straight month in which joblessness has remained below 4% — the longest such streak since the 1960s… Average hourly wages rose just 0.1% from January, the smallest monthly gain in more than two years, and 4.3% from a year earlier, less than expected.”<br /><br />March 6 – CNBC (Jeff Cox): “Private sector job growth improved during February though growth was slightly less than expected, payrolls processing firm ADP reported… Companies added 140,000 positions for the month, an increase from the upwardly revised 111,000 in January… Job gains came across multiple areas, led by leisure and hospitality with 41,000 and construction, which added 28,000 positions. Other industries showing solid gains included trade, transportation and utilities (24,000), finance (17,000), and the other services category (14,000). Of the total, 110,000 came from the services sector while goods producers added 30,000.”<br /><br />March 7 – Reuters (Amina Niasse): “U.S. layoff announcements rose 3% last month to the highest level in 11 months as automation-related restructuring continues to take a toll… Job cut announcements reached 84,638 in February - the highest since last March - from 82,307 in January, outplacement firm Challenger, Gray & Christmas said. It was the highest total for the month of February since 2009, although on a year-to-date basis cuts so far in 2024 are down 7.6% from the same period last year… While the tech sector leads all industries in job cuts so far this year, cuts are still down by 55% year to date compared with the same period in 2023.”<br /><br />March 5 – Reuters (Lucia Mutikani): “U.S. services industry growth slowed a bit in February amid a decline in employment, but a measure of new orders increased to a six-month high, pointing to underlying strength in the sector. Despite the weakness in employment, comments from services businesses in the Institute for Supply Management (ISM) survey on Tuesday were generally upbeat, and suggested labor shortages remained a constraint for some… The ISM said its non-manufacturing PMI slipped to 52.6 last month from 53.4 in January… Fourteen services industries reported growth last month, including construction, retail trade, and public administration, as well as utilities and wholesale trade.”<br /><br />March 7 – Bloomberg (Christopher Condon): “US consumer borrowing in January exceeded forecast as non-revolving credit climbed the most in seven months. Total credit rose $19.5 billion after a revised $919 million gain in December, according to Federal Reserve data... Total credit outstanding hit a record $5.04 trillion. Non-revolving credit, such as loans for vehicle purchases and school tuition, increased $11.1 billion. Revolving credit, which includes credit cards, climbed $8.4 billion in January.”<br /><br />March 6 – CNBC (Diana Olick): “Spring hasn’t officially sprung yet, but the spring housing market already appears to be on the move despite stubbornly higher mortgage rates. Mortgage applications to purchase a home increased 11% last week compared with the previous week… Demand was still 8% lower than the same week one year ago… There were 14.8% more homes actively for sale in February compared with the same time last year, according to Realtor.com. Notably, homes priced in the $200,000 to $350,000 range grew by 25% from a year ago…”<br /><br />March 7 – Reuters (Amina Niasse): “U.S. homebuying sentiment rose for a third consecutive month in February largely because a growing view among current homeowners that now is a good time to sell their house could bode well for a much-needed uptick in home listings. Fannie Mae’s Home Purchase Sentiment Index increased by 2.1 points in February to 72.8 from 70.7 in January... On a year-over-year basis, it rose by more than 25%.”<br /><br />March 6 – Reuters (Lindsay Dunsmuir): “There was an uptick in U.S. economic activity from early January through late February while inflation and the jobs market presented conflicting signals on how quickly they will cool further, a U.S. Federal Reserve survey showed…, underscoring the complicated picture for central bankers as they seek to fully tame pricing pressures… ‘Economic activity increased slightly, on balance,’ the Fed said…, known as the ‘Beige Book,’ which polled business contacts across the central bank's 12 districts through Feb. 26. "The outlook for future economic growth remained generally positive, with contacts noting expectations for stronger demand and less restrictive financial conditions over the next 6 to 12 months.”<br /><br />March 7 – Bloomberg (Michael Sasso): “Small businesses in the US remained upbeat in their outlook for 2024 despite elevated debt burdens and high borrowing rates that limited their access to new credit, a new Federal Reserve survey showed. The Fed’s 12 regional banks… released their credit conditions survey of more than 6,000 firms with fewer than 500 employees. Overall, expectations were fairly positive for the remainder of the year, with 57% foreseeing a bump up in revenue and only 19% expecting a drop, according to the annual Small Business Credit Survey conducted last fall. A large minority, 39%, expected to increase employment this year, against 11% who anticipated a reduction. Half of employers said their job count would stay flat. Small business expectations for growth generally tracked increasingly optimistic forecasts.”<br /><br />March 5 – Bloomberg (Ben Holland): “US households are now paying roughly as much interest on other kinds of debt, from credit cards to student loans, as they are on their mortgages, according to… the Bureau of Economic Analysis. Non-mortgage interest payments climbed to an annual rate of $573.4 billion in January. That’s the highest on record even after adjusting for inflation — and within a hair’s breadth of the $578.3 billion in annual mortgage interest that households were shelling out as of the last quarter of 2023. The near-parity between the two series over recent months is unprecedented in data going back to the 1970s. For most of that period, interest payments on mortgages were about twice as large as other kinds.”<br /><br />March 7 – Bloomberg (Mia Gindis): “New York’s private-sector workforce jumped to a record of 8.35 million jobs in January, marking the state’s full recovery from the coronavirus pandemic, Governor Kathy Hochul said. The state has added more than 1.9 million private-sector jobs since the height of the pandemic in 2020, when employment hit a 30-year low of 6.4 million… Private education, health care, leisure and hospitality drove the gains, the governor said. ‘Business is booming, New Yorkers are getting back to work, and thanks to a major economic relief package I announced in my first months in office, our communities are stronger and more vibrant than ever,’ Hochul said…”<br /><br /><span style="font-size: large;">China Watch:</span><br /><br />March 6 – Financial Times (editorial board): “The maiden speech of Li Qiang, China’s premier, to the National People’s Congress this week felt like a blast from the country’s ideological past. He lavished paeans of praise upon his boss Xi Jinping… but failed to outline in detail how Beijing plans to combat multiple economic impediments… He was at pains in his hour-long address to make clear where the current power lies. The achievements of 2023, Li said, were thanks to Xi, ‘who is at the helm, charting the course, to the sound guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era’. The display of subservience came one day after Beijing scrapped a tradition that China’s premier gives a televised press conference at the close of the congress. Such signals, taken together, contribute to a sense that it is ideology more than generating prosperity that really animates Beijing. This cognitive shift is, in turn, driving a reorientation of international capital away from Chinese assets to seek returns in Japan, India, south-east Asia and other markets.”<br /><br />March 6 – Wall Street Journal (Rebecca Feng): “China’s central government is ready to load up on debt to help the economy. Beijing is planning this year to issue $139 billion of ultralong special treasury bonds, a crisis management tool that will now become a regular source of funding, at least for the next few years. The move will take part of the burden for funding the country’s economic growth away from heavily indebted local governments, some of which are facing severe strain after years of heavy borrowing… The country’s local governments have long played a crucial role, allocating trillions of dollars of resources, greenlighting real-estate projects and new factories… But they have also loaded up on debt—creating a financial time bomb that China needs to defuse at the same time as encouraging growth. ‘The central government is taking over the role of local governments as the main body of fiscal leverage,’ wrote analysts at Fitch Bohua, a credit-rating company…”<br /><br />March 6 – Bloomberg: “China’s top economic officials defended the nation’s plan to grow the economy by around 5% this year and hinted at a potential liquidity boost, one day after the ambitious target was met with skepticism… Pan Gongsheng, governor of the People’s Bank of China, said there’s still room to cut the reserve requirement ratio for banks, which would allow lenders to keep smaller reserves and therefore encourage lending. Zheng Shanjie, chairman of the National Development and Reform Commission, struck a confident tone on the country’s growth outlook, saying the GDP goal is a ‘positive target that can be attained through vigorous effort.’”<br /><br />March 5 – Reuters (James Pomfret, Kevin Yao and Ellen Zhang): “Facing its deepest economic challenges in years, China's leadership has tasked ministries and local governments with implementing a new mantra from President Xi Jinping: unleash ‘new productive forces’. In his annual report to China’s legislature…, Premier Li Qiang, Xi’s top deputy, vowed a ‘new leap forward’ by supporting developing sectors and industries including electric vehicles, new materials, commercial spaceflight, quantum technology and life sciences. The term ‘new productive forces’ was coined by Xi last September during a trip to a rustbelt city in northeast China…”<br /><br />March 4 – Bloomberg: “China’s property debt crisis is showing new signs of trouble after entering its fourth year, with one of the country’s major state-backed developers placed under unprecedented scrutiny by investors. Some of China’s largest insurers are sounding an alarm over the debt risks of China Vanke Co., according to people familiar…, as shares and bonds of the major developer hit record lows on repayment concerns. At least two Beijing-based insurers that farm out annuity investments told their external portfolio managers late last week to closely monitor Vanke’s credit risks, said the people, asking not to be identified discussing a private matter. One life insurer also told its pension managers to curb exposure…”<br /><br />March 6 – Bloomberg: “China Vanke Co. is facing deepening pressure as several major insurers seek to protect their privately issued debt on concerns over potential liquidity stress at the nation’s second-largest developer, according to people familiar…. At least three Beijing-based insurers sent executives to Vanke’s headquarters in Shenzhen this week to discuss debt repayment plans under the local government’s coordination… Options include extending the deadline for repayment by a year, adding collateral and issuing bonds, the people said.”<br /><br />March 7 – Reuters (Joe Cash): “China's export and import growth in the January-February period beat forecasts, suggesting global trade is turning a corner… China's improved export data joins those of South Korea and Germany, and Taiwan, who all saw their shipments top expectations over the first two months of the year… Exports from the world's second-biggest economy in the two months were 7.1% higher than a year before… Imports were up 3.5%...”<br /><br />March 6 – Bloomberg: “China’s raw materials purchases surged in the first two months of the year, as importers took advantage of weaker prices for some commodities and prepared for more stimulus from Beijing to lift demand. Imports of most industrial commodities handily beat their levels of a year ago… Energy showed the most notable gains, including a 36% jump in refined oil products. Lower international prices for natural gas and coal saw imports climb by more than 20%. Crude oil shipments rose 5.1%.”<br /><br /><span style="font-size: large;">Global Bubble Watch:</span><br /><br />March 5 – Reuters (Siddarth S): “Global deal-making volumes will rise by 50% this year compared to 2023 as fears over funding costs, inflation and recession concerns abate, Morgan Stanley said… ‘We think that this 'winter' for mergers and acquisitions (M&A) is thawing and activity is set to return cyclically and secularly,’ the… brokerage said. Morgan Stanley expects Europe and North American regions to benefit the most from deal-making activity, but also sees favorable M&A weather for India, Australia, South Korea, Japan and ASEAN (Association of Southeast Asian Nations) countries.”<br /><br /><span style="font-size: large;">Central Banker Watch:</span><br /><br />March 7 – Financial Times (Martin Arnold): “The European Central Bank has signalled June is the earliest it is likely to cut interest rates after it lowered its forecasts for inflation, predicting it will reach its 2% target next year. The central bank maintained its benchmark deposit rate at an all-time high of 4%... But it lowered its inflation forecast for this year from 2.7% to 2.3%, and trimmed it for 2025, opening the door to possible rate cuts in the coming months. ‘We are making good progress towards our inflation target and we are more confident as a result,’ said ECB president Christine Lagarde. ‘But we are not sufficiently confident. We clearly need more evidence and more data. We will know a little more in April, but we will know a lot more in June.’”<br /><br /><span style="font-size: large;">Japan Watch:</span><br /><br />March 4 – Reuters (Takahiko Wada and Leika Kihara): “Core inflation in Japan's capital re-accelerated in February above the central bank's target…, a sign conditions for ending negative interest rates were falling into place… The data will be among factors the Bank of Japan (BOJ) will scrutinise ahead of its policy-setting meeting on March 18-19 in judging whether to phase out its massive stimulus programme. Core consumer price index (CPI) in Tokyo, a leading indicator of nationwide figures, rose 2.5% in February from a year earlier, matching market forecasts…”<br /><br />March 7 – Reuters (Erica Yokoyama and Yumi Teso): “Speculation surged that the Bank of Japan will move this month to raise interest rates for the first time since 2007, after a flurry of reports and wage figures helped drive up the yen, bond yields and overnight swaps. Bets on the March 18-19 meeting are gaining traction as reports emerge that some BOJ officials favor an early move while some government officials also support a rate hike.”<br /><br />March 5 – Bloomberg (Toru Fujioka and Sumio Ito): “The Bank of Japan will probably need at least nine years to normalize its balance sheet in the earliest-case scenario after a massive monetary easing program that ran for more than a decade, according to a former executive director. The BOJ is widely expected to kick off its normalization process this month or in April by ditching the negative interest rate. After that move, the first hike since 2007, how quickly it plans to tackle its bloated balance sheet will be a key question for investors. As Yamamoto sees it, normalization would mean bringing the balance sheet back to a level where it’s just a little more than required reserves. The bank would have to shed ¥440 trillion ($2.9 trillion) of bonds from its portfolio to reach that point.”<br /><br /><span style="font-size: large;">Emerging Market Watch:</span><br /><br />March 6 – Bloomberg (Mirette Magdy and Tarek El-Tablawy): “Egypt delivered its biggest-ever interest-rate hike and allowed its currency to weaken more than 38% in a long-awaited devaluation that may pave the way for billions more in loans from the International Monetary Fund… A dire shortage of foreign exchange has until now hammered businesses and caused the cost of imported goods to soar. The Israel-Hamas war has added to economic pressures. The devaluation may stoke inflation and hurt Egyptians in the short term.”<br /><br />March 3 – Bloomberg (Marcus Wong and Matthew Burgess): “Central bank independence is becoming an increasingly key battleground in emerging markets, and one that bodes ill for currency and bond investors. The Thai baht has come under recurring pressure in recent weeks due to a standoff between the prime minister and policymakers over the timing of interest-rate cuts. Hungary’s forint neared a one-year low versus the euro this past week amid an ongoing clash between Prime Minister Viktor Orban and the country’s central bank chief. Brazil’s real and the Turkish lira have long been whipsawed by the two countries’ leaders calling for lower borrowing costs.”<br /><br /><span style="font-size: large;">Social, Political, Environmental, Cybersecurity Instability Watch:</span><br /><br />March 7 – Washington Post (Evan Halper): “Vast swaths of the United States are at risk of running short of power as electricity-hungry data centers and clean-technology factories proliferate around the country, leaving utilities and regulators grasping for credible plans to expand the nation's creaking power grid. In Georgia, demand for industrial power is surging to record highs, with the projection of electricity use for the next decade now 17 times what it was only recently. Arizona Public Service… is also struggling to keep up, projecting it will be out of transmission capacity before the end of the decade absent major upgrades. Northern Virginia needs the equivalent of several large nuclear power plants to serve all the new data centers planned and under construction. Texas, where electricity shortages are already routine on hot summer days, faces the same dilemma. The soaring demand is touching off a scramble to try to squeeze more juice out of an aging power grid… ‘When you look at the numbers, it is staggering,’ said Jason Shaw, chairman of the Georgia Public Service Commission…”<br /><br />March 5 – Bloomberg (Leslie Kaufman, Saijel Kishan and Nadia Lopez): “It is so easy to start a wildfire. A smoldering campfire, a lightning strike, an errant firework or a spark from a power line or a hot muffler: However California’s next monumental blaze begins, the toll will be vast. People will be injured, some will die. Thousands of homes will be destroyed… Some 11 million people live in California’s high-risk wildfire zones, areas that include Los Angeles county, San Diego and the vineyards of Napa and Sonoma. Not long ago, they and homeowners in natural disaster regions around the US would have almost certainly had insurance through a big, national company… But a growing number of insurers are cutting their business in those areas, deterred by more intense and frequent natural disasters, plus state-imposed limits on how much they can charge.”<br /><br /><span style="font-size: large;">Geopolitical Watch:</span><br /><br />March 3 – Reuters (Hyonhee Shin): “South Korean and U.S. militaries kicked off their spring drills on Monday with twice the number of troops joining compared to last year, officials said, as the allies seek to better counter North Korea's increasing nuclear and missile threats. The Freedom Shield exercises, set for March 4-14, come as North Korea continues to develop its nuclear capabilities with missile and other weapons tests. It will also be first since Pyongyang scrapped a 2018 inter-Korean military pact in November.”<br /><br />March 1 – Bloomberg (Jonathan Tirone): “Iran’s decision to reduce its stockpile of near bomb-grade uranium in favor of producing a specialized fuel for advanced civil nuclear reactors may be a negotiating tactic, according to western officials. Under most circumstances, a move by Tehran to scale back its inventory of highly-enriched uranium would be welcomed by diplomats at the International Atomic Energy Agency… But escalating tensions in the Middle East — including military clashes between US and Iranian proxy groups — has raised suspicions about what’s really happening in the Islamic Republic.”</div>Doug Nolandhttp://www.blogger.com/profile/16205512922521957121noreply@blogger.comtag:blogger.com,1999:blog-8372678976953624833.post-29778857521295282652024-03-08T15:03:00.000-08:002024-03-08T15:07:47.928-08:00Friday Evening Links<p><a href="https://ca.finance.yahoo.com/news/gold-extends-record-run-2-141759089.html">[Yahoo/Bloomberg] Gold Extends Record Run With $2,200 in Sight After US Jobs Data</a></p><p><a href="https://ca.finance.yahoo.com/news/asian-stocks-track-us-rally-224440545.html">[Yahoo/Bloomberg] Stocks Suffer ‘Heat Check’ as Rally Hits a Wall: Markets Wrap</a></p><p><a href="https://www.reuters.com/markets/global-markets-wrapup-1-2024-03-08/">[Reuters] Stocks backpedal from record highs on US payrolls, yields dip</a></p><p><a href="https://ca.finance.yahoo.com/news/powell-scaring-no-one-wall-211826677.html">[Yahoo/Bloomberg] Powell Is Scaring No One on Wall Street as Market Gains Broaden</a></p><p><a href="https://ca.finance.yahoo.com/news/summers-says-fed-wrong-neutral-193735874.html">[Yahoo/Bloomberg] Summers Says Fed Is ‘Wrong’ on Neutral, Warns on Rate-Cut Bets</a></p><p><a href="https://www.reuters.com/markets/us/fed-gets-another-reason-not-rush-rate-cuts-2024-03-08/">[Reuters] US job market data bolsters Fed's 'no rush' rate cut view</a></p><p><a href="https://ca.finance.yahoo.com/news/fed-goolsbee-sees-lower-rates-192902859.html">[Yahoo/Bloomberg] Fed’s Goolsbee Sees Lower Rates as Inflation Falls This Year</a></p><p><a href="https://ca.finance.yahoo.com/news/inside-story-york-community-bank-192020691.html">[Yahoo/Fortune] The inside story of New York Community Bank’s $1 billion lifeline</a></p><p><a href="https://www.ft.com/content/76d07a7e-3af4-4024-854f-61828ad1b25a">[FT] Central bankers see victory within reach in push to tame inflation</a></p>Doug Nolandhttp://www.blogger.com/profile/16205512922521957121noreply@blogger.com