Commodity Trade Mantra

Posts Tagged ‘Liquidity’

Are Central Banks Creating Deflation?

The unintended consequences of continuing to delve deeper into the new paranormal are making the game ever more dangerous as we now have central banks accidentally creating deflation while simultaneously embedding enormous amounts of risk in fixed income markets by sapping every last vestige of liquidity.

Is The Claimed Gold Really There? – Part II

When gold becomes “important” again, really and truly having it WILL matter. “Trust us” will no longer be good enough, proof will be required. Gold demand will explode either out of financial fear of the actions in paper markets or …it will explode because the revelation is uncovered the “gold really isn’t there”. BOOM…

Citi Warns - Central Banks Grip On The World Economy Is Waning

Not only are central bank policies having a disappointing effect on business sentiment and investment; they are failing even to revive inflation expectations. Despite having growing doubts as to central banks’ ability to create durable economic growth, we remain convinced as to their ability to push up risky asset prices.

Shale Liquidations Begin? Sub-$50 Oil Appears In North Dakota

While oil market analysts debate if oil will fall to $50, prices are already there in North Dakota. Cheaper price for North Dakota crude underscores how geographic & logistical hurdles can amplify the stress that plunging futures prices have put on drillers in new shale plays that have helped push US oil production to the highest level in 31 years.

Janus Yellen & the Great Transition from Risk-On to Risk-Off

Regardless of how Janus Yellen tries to sell the idea as the miraculous “fix” to the systemic bubble in claims the central banks have inflated, it will fail just as predictably as her plan to defuse the risk-on trade while maintaining the inflated value of the phantom assets the speculative frenzy has created out of nothing.

Why We Should Fear the REPO

The REPO market is the transmission mechanism that drives liquidity. REPO, also related to “shadow finance” is the core catalyst – the perpetual financial motion generator, the way constant leverage is conjured out of nothing on a daily basis. It drives worldwide liquidity and/or credit. It has enabled the funneling of credit into equities.

Fed Prepares For Bond-Fund Runs, Looking At Imposing "Exit Fee" Gates

Since the Fed has failed to incite the mass reallocation of funds from bonds to stocks, it is willing to use every trick in the book to achieve its goal. Fed may impose exit fees on bond funds to avert a potential run by investors, underlining regulators’ concern about the vulnerability of the $10tn corporate bond market.

Liquidity Becoming A Serious Issue As Japan's Bond Market Death Goes Global

Government intervention has killed the largest bond market in the world. While there are ‘trade-less’ sessions now in Japanese bonds, lack of liquidity is becoming a growing problem in US Treasuries (where Fed owns 1/3rd of the market) & Europe where as JPMorgan warns, “some of this liquidity may be more superficial than really deep.

What Is High-Frequency Trading, Exactly?

Rise of the robots certainly seems to have helped investors. Bid-ask spreads have fallen dramatically in the past 20 years. High Frequency Trading has added more liquidity, eliminating bid-ask spreads that would have been too small to do so before. But it doesn’t mean that HFT is unambiguously good.

Forget HFT: The 4 Greatest Market Risks To Investors Now

Greed & fear are the oils that run the market machine. Markets have & always will be “rigged” to some degree. However, what has the most important effect on your long term financial prosperity is managing the risks of investing that can do long-term, irreparable damage to your financial health.

Yellen Promises More - Evidence Suggests Less

While Yellen remains committed to ongoing QE programs to support the recovery, not surprisingly, the asset markets rallied sharply on her testimony as the primary concern as of late has been the removal, or tapering, of QE that has been primarily responsible for driving asset prices higher.

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