Summary: China’s top central banker acknowledged his institution is undertaking radical reform. This is not a good sign, instead a critical signal that the music has indeed stopped where it matters, if only to start playing a different song in a different venue. Once central banks shift to “communication” you know it is over, not for them but for the real power and money in the world. The consequences are enormous and are going to be with us for a very long time.

Summary: The latest update on the ongoing saga of Basel’s so-called Endgame. Recent reports suggest the Federal Reserve is willing to substantially scale down some of the proposals. Questions remain as to whether the other regulators will go along. While the discussion continues, we have more projections on potential effects and their costs from a couple of sources. It isn’t so much the simulated measurements they’ve produced which should grab the attention of everyone involved, but why the estimates turned out the way they did.

Summary: Two matters now dominate the foreign financial affairs of the US government: Russia and China. The latter is a new development though one whose roots are very much intertwined with parts of the other. Russia is currently benefiting from the real power of the eurodollar system, inadvertently illustrating why China is not now nor will ever be able to get out from under it. We’ll discuss the short run implications as well as the long run picture.

Summary: The dollar continues to be dominant in the most critical aspect of the modern reserve currency dynamic: FX. Despite the loss of some “petrodollars” there never was a threat from the “petrodollar” because the latter never existed. Economics has left the public with a host of misconceptions since Economists have failed to accurately account or even depict how money functions let alone reserve currency money

Summary: How much of this overwhelming “vibe” of recession is real? According to most mainstream sources, it is purely a matter of biased perspective. That view seems to be based on solid data. Yet, it is actually grounded in incomplete interpretation of questionable data that gets more so not less. Some important recent updates raise more problems by showing the “vibe” has already been far more plausible.

Summary: Continuing to evaluate the effectiveness of our monetary and financial signals. With markets on a rampage right now, it is as important as ever to calibrate and review. What have massive inversions really been saying all this time? What does their increasingly negative spreads say about what’s still ahead?

Summary: With curves hugely inverted, it’s quite natural to ask, what are the chances they are sending a false positive? The answer to that question depends on what you mean. Here we’ll take the first of several deeper dives into the recent history of curve/financial indications to evaluate them for their usefulness and performance. In doing so, we’ll uncover what they’re really telling us. It isn’t about another Lehman.