Eurodollar University

We went from the economy is strong and resilient, credit markets are fine reaching for yield to big names like Jamie Dimon and now so-called bond king Jeffrey Gundlach openly talking about cockroaches and garbage lending that are looking more like 2006 and 2007 every day. We’ve even got news of more hedge fund redemptions. Unlike a few months ago, now all of a sudden the possibilities seem plausible to people who forever r...

The European labor market is on the cusp of its own flat Beveridge moment. That danger was amplified by the third quarter contraction in the Swiss economy, which, as we know, is a key leading global indicator. And if all that wasn’t enough, a group of German Economists, of all people, just tore into the mainstream European narrative of Europe being in a good place. They even went so far as correctly, of course, crap all ov...

An unprecedented slump in Chinese investment. That’s what one media outlet called it. I don’t think slump is the right word. Crash might be a more appropriate one. While that tends to be overused, the numbers show not in this case. Especially when they are backed up by a crash in household lending in China, too, as Chinese banks just put up more grim stats. And all of this confirmation of what I told you months ago, the so...

Big moves across the risk markets this week. Bitcoin and crypto hammered. Repo back on the menu. WTI full contango (briefly). Plus, top officials at the New York Fed soft confirming the start of the next  not-QE QE. What does it all mean?

Eurodollar University's conversation w/Steve Van Metre

What is a Eurodollar University membership? It’s where understanding the monetary world isn’t a mystery—it's a method. If you’re serio...

Flat Beveridge strikes again. You know the drill. We’ve been stuck in forgot how to grow and its no-hire/no-fire labor market the past few years. That began to change last year, especially last summer when no-hiring somehow got to be even less hiring. Then last year and this year, no-firing became some firing, in other words, shifting to the flat part of the Beveridge curve. But what we’ve been getting more recently looks ...

The collapse and bankruptcy of another private credit supported firm has generated significant losses this week. But as I pointed out last week with the shuttered UBS sponsored hedge funds, it isn’t necessarily the amount of money being burned. It’s what each of these cockroaches reveals, and how they add to the growing mistrust about the entire private credit shadow banking network. That’s the real danger which could thre...

Fast food chain Wendy's said it’s closing hundreds more US locations than previously announced because customers can’t afford to eat there. It fits with what McDonalds US President said last week about how the entire industry is fighting for contracting traffic. It sounds practically Chinese talking about oversupply of cheap hamburgers and chicken nuggets. But as we know only too well from China’s economy, it isn’t too muc...

The federal government may be opening back up but the administration floating a tariff dividend is the real news here. It’s yet another dose of reality showing the stock market is not that reality. Americans are struggling and the timing behind this dividend is transparently in response to worsening economic conditions. After all, more Americans say they think unemployment is coming than at any time since 1980.

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CarMax sacked their CEO after preannouncing just brutal results for an industry already reeling and at the epicenter of the current ongoing breakdown in credit markets. The stock plunged 25% Thursday when management disclosed unit sales are looking to crash by 8 to 12% in the latest quarter. Relatedly, consumer confidence plunged to record and near-record lows...and it has little to do with the govt shutdown. 

Eurodollar Un...

UBS is reportedly closing down not one but two hedge funds, in a more that raises a lot of questions but also some very uncomfortable parallels to 2007. One of those funds is exposed to First Brands, so understandable. The other...isn't. And that raises the prospect of the R-word; in this case, that does not stand for recession, rather its uglier monetary twin. 

Bloomberg UBS Winds Down O’Connor Funds in Sign of First Brand...

The most October job cuts in over twenty years. More than October 2008, if you’re keeping score. While that doesn’t mean this is a repeat of 2008, can we all finally admit this is a really serious situation? And as the flat Beveridge curve emerges more clearly, the rising unemployment it represents is also causing collateral damage, pun intended. The New York Fed said yesterday auto, credit card and student loan delinquenc...

The dollar is accelerating and not in the direction most people were anticipating, to the point it has rattled the entire cryptocurrency space. That’s why cryptocurrencies like Bitcoin just got hit with a major selloff this week as the dollar debasement theme which had driven their latest surge comes up completely empty. More important than that, however, the dollar is accelerating higher which signals quite a lot all its ...

Not only is retail giant Target not committing to the big seasonal hiring it always does, the company is actually laying off nearly 2000 of its corporate staff in its biggest management and job shakeup in years. Target is merely the latest “one-off” big name to announce job cuts. No wonder consumer confidence just took another huge hit and that was from the one survey that has held up the best this year.  

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The cash squeeze in wholesale money markets that we’ve been following got a whole more exciting on Friday, and now we have the full set of numbers on it. Interest rates soared the most since 2020 further proving the Federal Reserve’s program which is supposed to keep this from happening doesn’t keep it from happening. Imagine my shock. We also know that there were plenty of spare reserves available, too. And with more borr...

The ECB this week held its policy rate right at 2% with policymakers out in force claiming to everyone who might listen they’re likely done at that level. Instead, GDP data from all over the continent just came out and showed there’s more pringles yet to come from Europe. But there’s also one big factor here few people are considering and it has to do with the 2% level itself.  

Eurodollar University's Money & Macro Ana...

New home sales in China collapsed by 42% in October when compared to last October, representing more than just another setback for the beleaguered Chinese real estate market, the world’s largest asset class. This is a major problem for Chinese banks, not that they were expecting different. So, we see interest rates are back to moving lower, setting multi-month lows with the latest short-lived stretch of optimism based on C...

The reason why Fed Chair Jay Powell didn’t want to commit to a December rate cut is simple. A number of voting members at the FOMC are not convinced the weak labor market is actually all that weak. Sure, the numbers don’t look good, but they’re wonder if it is real. Well, Chipotle and Kraft-Heinz would like to answer them with a pair of serious warnings about what they’re seeing from consumers.  

Eurodollar University's Mon...