Central banks greased Brexit with $1T ‘liquidity’

So the numbers are out for Brexit. It will go a long way to explain why markets bounced so sharply after plunging on Friday and Monday. The Bank of England provided its banks with more than $345B on Friday and Monday. The ECB put $399B to work for its large member banks including Deutsche Bank […]

Brexit overshadowed Q1 GDP abomination

With all the Brexit talk I neglected to write about the final revision for US Q1 GDP. It came in at a robust 1.1% annualized or 0.2525% for the quarter. To show where we are, that number beat the last revision of 0.8, which was also near consensus. Just short of eight years under Obama […]

Alice would feel comfortable in our own “Jabberwocky”

So the pound sterling is soaring as the euro strengthens, while dollar, yen weaken. Welcome to central bank currency manipulation. The UK was downgraded yesterday to AA from AAA by S&P and Fitch, yet the pound is stronger and UK bond yields went lower. Go figure. We must be in “Jabberwocky”, and I half expect […]

Brexit will force Yellen’s hand on rates

Contrary to what the Street says, I believe Brexit will force Fed chief Janet Yellen’s hand to seriously consider raising rates in July. As the dollar and yen strengthen, while sterling and euro get weaker, the Fed will need to pare back that move with a rate hike to balance capital flows out of Europe. […]