bond market vigilantes

A number of recent articles suggest that Chinese officials may reduce their purchases of U.S. government bonds. It is very unlikely that China can do so in any meaningful way because doing so would almost certainly be costly for Beijing.…

Treasuries as a political weapon If you don't have the right model of the economy and markets in your head, you can lose lots of money. Case in point is 'The Widowmaker Trade' in Japan where speculators misunderstood the limits of monetary…

I was reading about the potential candidacy of former Starbucks CEO Howard Schultz for US President in the 2020 election just now. He plans to run as an independent, potentially dividing the anti-Trump vote, should Trump survive until then.…

Is the fiscal debate political or market-driven? The eponymous debate in the US over government spending, debt and deficits is whether the issues are fundamentally market-driven or politically-motivated. For example, recently Trump economic…

I continue to believe that the bond bear market thesis is flawed. Money managers following it will lose a lot of money.

Yesterday’s market meltdown - and today's reaction - reduces the risk that the Fed will over-tighten, taking froth out of an over-extended market.

When defaults begin to rise and the economy begins to slow, we will find out whether deficits really drive rates higher or cause inflation to rise and remain high.

My contention has been that the first two arrows of Abenomics gave the Japanese economy a short window to bring the Japanese labour market back to full employment, re-ignite wage gains, and institute structural reforms. In my view, Abe has…

As the US government shutdown continues, the risk of default grows. Below are some thoughts on why this has played out as it has and what the outcome may be.

The same people who have been screaming inflation for the past few years are now saying that interest rates are finally about to explode. This is alarmist nonsense that disregards the influence policy rates have over the term structure of…