March 23 – Wall Street Journal (Dawn Lim): “A broad set of bond exchange-traded funds are trading out of sync with their underlying assets, testing investors’ faith in a fast-growing part of the investment world. Fewer dollars would raise the cost of obtaining the currency from the pools that have developed outside the US since the Fed began flooding markets with money via quantitative easing in 2008. May 7 – Wall Street Journal (Gunjan Banerji): “Falling volumes. Japan engaged in a lengthy trade dispute with the United States in the 1980s, with a series of deals over currency and market access blamed in some quarters for the decades of economic stagnation that followed. This week, President Donald Trump and his deputies hit out at some of America’s closest friends, blasting a ‘dumb’ refugee resettlement deal with Australia and accusing Japan and Germany of manipulating their currencies. Bank of Japan and the European Central Bank continue to rely on massive quantitative easing in a battle to revive consumer-price growth. “The global market rout has dealt a particular blow to a trade that intertwines Silicon Apple Valley first time home buyer program stock-market favorites with cautious Asian savers and European asset managers.
‘man-made’ crises such as trade tensions. As Europe and North America hunker down, the latest estimates suggest 10 to 25% of global consumption could vanish in the coming few months… For an industry long aware that a 1-2% swing in the balance of supply and demand can be the difference between prices soaring or collapsing, the extent of the fall in consumption is hard to process. As western economies go into hibernation, hoping to snuff out the first wave of coronavirus through lockdowns and isolation, the industry is facing up to the fact that fuel demand is going to fall faster than ever before. March 25 – CNBC (Jeff Cox): “The coronavirus crisis has brought another first to U.S. March 23 – Reuters (David Milliken): “Britain faces a ‘much more serious’ economic challenge now than in 2008 when the country’s banking system almost collapsed, and must be prepared for far higher borrowing, former Bank of England Governor Mervyn King said… The silver lining: they now have much less to sell. Now those shadow banks… That made banks safer but their actions pushed the risk of rising defaults into the shadows. The traders hoped to sell a ‘modest’ holding of 30-year US government bonds – one of the safest, most easily traded financial assets in the world – and asked three of the banks specially tasked with supporting US government debt auctions for prices.
Private corporations. Though you may be comfortable with them, banks are usually the easier option. ‘It’s precisely what the global economy does not need at this moment,’ Alexander Wolf, head of Asia investment strategy at JPMorgan Private Bank… Many Real Estate Investment Trusts, which have relied on the short-term money markets to boost dividend payouts, are also being pummeled. You will have to take on debt to finance your upgrades, unless you have significant savings you can use. After taking into account falling prices, the market-neutral funds, which take no directional bets on the benchmark, offloaded 15% of their bets in the five days through Thursday. It follows liquidity doses of the same size Thursday and Wednesday, and $53.2 billion on Tuesday. August 8 – Reuters (Jennifer Ablan): “U.S.-based high-yield junk bond funds posted more than $4 billion of outflows in the week ended Wednesday, the largest weekly cash withdrawals since October 2018, according to Refinitiv’s Lipper data… Outflows totaled $135 billion, compared with $27.9 billion the prior week. 1 billion into two of its prime money-market portfolios this week due to heavy investor withdrawals, according to a filing with the U.S.
March 24 – Reuters (Hideyuki Sano): “Banks borrowed a total of $89.3 billion in the Bank of Japan’s two dollar funding operations on Tuesday, the central bank said after it offered three-month and one-week funds to market players who were seeking dollar funding. Two refused to bid at all. March 22 – Bloomberg (Chris Anstey and Enda Curran): “The global rush for dollars that’s been roiling the $6.6 trillion a day foreign-exchange market has showcased a missing piece of financial-safety architecture that world policy makers never addressed in the aftermath of the 2008 crisis. I think this piece was done to try to scare the hell out of those in our society who are NOT, for whatever reason, saving for retirement. While getting home mortgage refinance, try to get the lowest possible rates. The federal mortgage agency said its home purchase sentiment index increased by 5.5 points to 89.8 points, its highest since last June.