The speed of Fed rate hikes this year, in 2022, is unprecedented in history. In just six months, the Fund rates have risen more than 2% at a time when the public deficit is also at an unprecedented level at over 31T USD. The speed of Fed rate hikes is bleeding its livestock (citizenry) dry Interest on the public debt is fast approaching 500B USD, the third largest budget item costing every adult farm animal 13,491 USD per year,...
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Collapsing market liquidity is flashing red everywhere. The Federal Reserve’s Repo hit a record 351BN, its biggest weekly jump in history in the first week of November. The Repo market is an important component of the capital market, which provides short-term liquidity The last time the $3 trillion Repo Market blew up was in mid-September 2019 when the Repo rates spiked to 10%. I remember forecasting market turbulence, bearing...
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Recovery could be insight following the worst year for investors in more than four decades which has seen trillions of dollars wiped off all asset classes across the risk spectrum. The bubble of everything which burst in 2022 left no haven for investors, with even holders of prime sovereign bonds and precious metals nursing heavy losses. Great pivot, asset price support, and the recovery Staring down the barrel of a systemic crisis,...
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The Cboe Volatility Index, with the ticker symbol VIX, is a standard risk indicator used by financial traders. The VIX is also known as the stock market fear gauge index. How does the VIX work as a risk indicator? The VIX is calculated using a formula to derive expected volatility by averaging the weighted prices of out-of-the-money puts and calls. Bearish or pessimistic investor sentiment is represented in the options market by...
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So the great pivot to loosening is in play, which I forecast would happen in June. Staring down the double barrel of a systemic crisis, a sovereign bond crisis, and collapsing GBP, the Bank of England capitulated on September 28 and reverted to buying gilts. The tightening until it breaks mantra to fight inflation did not take long for the tough-talking inflation-fighting Hawks to step out of the ring as soon as they saw a knockout...
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