Wednesday, February 22, 2017

Two Year German Govt Bonds at all time (negative) lows


So is the Fed going to raise rates in the face of all of this over there?  I don't see it happening for now, looks like continued ZIRP at least short term. US Two year at least positive 1.22%. US overnight being supported at 0.5% pretty pathetic.





11 comments:

Footsoldier said...

What you trying to say Matt ?

Explain it in layman terms.

Matthew Franko said...

No fiscal help from increased US interest rates in March probably... rates are really low in EUR and USD and GBP zones....

This was the one potential for some nice fiscal increase in 2017... they were at one point talking about 3 raises this year... would have helped out fiscal flows but seems like this potential is decreasing...

I am less bullish fiscal flows for 2017 unless we get a return of a higher rate attitude from the Fed..

seems like there is probably too much "uncertainty!" at present for them to do March...

Maybe if (somehow, hard to see how at this point with all the "deficit!" hawkery) Trump gets his tax reductions and military increase and infrastructure they will raise in June....

imo continued green light for institutional managers to maintain/increase bids for equities if they dont do a rate increase in March...

Footsoldier said...

I don't think it was ever on the cards in March to be honest.

I was thinking the tax rebates will save the institutional managers and Trumps tax plan. The market is going to fall for his plan no matter what happens. If it includes tax cuts to the middle classes we are on the wrong side of the SP500 here.

Footsoldier said...

Does Mike think reverse Repo's add to the reserves ?

Footsoldier said...

Some MMT'rs don't like Mikes piece on the street.com

Fed Boosts Reserves by $375 Billion in Five Weeks

http://realmoney.thestreet.com/articles/02/10/2017/fed-boosts-reserves-375-billion-five-weeks

This is from the Guardian

Have you yet to work out how reverse repos conducted by a central bank increase reserves? You seemed very enamoured of the concept earlier today.

If "MMTers" like you place their faith in their understanding of the modern monetary system, which is simple accounting, should they not first learn to count? And, when they read something that is clearly ridiculous, should they not reject it as such, without any critical assessment?

Reverse repos adding to reserves? A total joke. Anyone who understands the modern monetary system would, upon reading that, have stopped reading, immediately.



MMT requires a basic level of numeracy,Repos and reverse repos both create reserves?

Good luck trying to explain that.



This guy didn't like that piece at all ?

Matthew Franko said...

I think Mike is just saying that in a RR the govt is a payer of USD interest to non-govt...

Footsoldier said...

I tried to tell him that and even posted the actual accounting.

http://heteconomist.com/exercising-currency-sovereignty-under-self-imposed-constraints/

He's one of those MMT'rs who thinks he is above what you and Mike do and everyone else because he worked in the banking industry for years.

Matt Franko said...

Well Mike worked in the banking industry for years too... Some people like that guy just cut themselves off from learning at some point....

"Alleging themselves to be wise, they are made stupid." Rom 1:22

Six said...

Matt ... I know I like to take shots at you when we have differences of opinion, but ...

"Alleging themselves to be wise, they are made stupid." Rom 1:22

... is one of my main guiding principles. Although, in my mind I usually phrase it something like "believing you're smart is one of the biggest learning impediments".

Tom Hickey said...

Now it's called the Dunning-Kruger effect.

See also the closely related Peter Principle.

Matt Franko said...

Six I think it is at core what we are really up against with these "we're out of money!" people... there's gotta be a way to judo it ...