I warned about HYG and real yields last Dec in "The Macro Brief: Damn, Too Much Junk In The Trunk." As well as BBB potential downgrade storm. Financial conditions still relatively loose.Groeth expectations will be a huge factor.
Alf, thank you for the insights. Your interviews with Jeff and Emile are incredible, in fact the second one ended way too early. Overall, though, I am happiest about the fact you are happy to keep repeating the basics (if we can call them that). As an amateur in this area (who has been studying and listening hard for two years) and a former language teacher, I understand the importance of repetition. Keep it up, the more you keep focusing on particular issues, the more information gets knocked into our (or at least my) heads. In my case, I start to build an image of how things like bonds and collateral work, but your work is what keeps refining that image and bringing it into focus. Words are great, but it's the images (or the parallels with things I can understand) the teach (at least me) at the end of the day. Kudos man, I never imagined I could get this sort of education for free.
Any article that starts with a Minsky quote gets extra points. Minsky becomes more relevant with each passing day (which isn't a plus for the markets...)
Thanks a lot Alf ! learning while listening to you is so cool. I thought I had a basic understanding of credit spreads market. But that was simply not the case as I realise after your podcast.
Hi Alf, I’m interested in learning as much as possible about the inner workings of the financial markets—the role of the repo market, the “shadow banking system,” the extent to which pension funds and corporate buybacks move the stock market, the exact amount of leverage in the system and its ramifications, etc. It’s so difficult to find any information that details the various constituents that make up “the market,” how big of a role each one plays, and how they interrelate. For example, only recently, because of an interview I happened to come across with Brian Reynolds, did I discover that individual active managers make up only a tiny fraction of “the market,” and that pension funds and corporate buybacks are almost entirely responsible for the roaring bull market over the past 10+ years. Where can I learn in depth about these topics? Your articles are fantastic and have helped me immensely.
Alf - you are the man! Found you via Eurodollar Uni and Blockworks - where have you been the last few years of my life!?!? Thank you for making your content and knowledge freely available - it is incredibly useful to this outsider/amateur. I appreciate you very much and can't wait to go through your back catalogue!
I do have question though - would it also be valid to monitor to watch Investment and High yield corporate spreads via the FRED series?
EU 29s trade about flat to AFLBNK (French agency) 29s. AFLBNK is a 20% risk weight name. EU is 0%. AFLBNK is comparatively much more illiquid than EU, which is maybe the most liquid name in the government related sector. So is it about liquidity/regulations or about OAT ASW? Where does KFW trade today vs where it traded at the time of this post? Have any regulations changed and/or is it harder to buy KFW?
I warned about HYG and real yields last Dec in "The Macro Brief: Damn, Too Much Junk In The Trunk." As well as BBB potential downgrade storm. Financial conditions still relatively loose.Groeth expectations will be a huge factor.
Lovely article. Thanks
Fantastic article. That really helped improve my understanding of this part of the deed it market. Ottimo lavoro Alf!
Hey Alf thanks for the lesson, I am new to the macro landscape. What do you think are the fundamentals I have to understand?
Alf, thank you for the insights. Your interviews with Jeff and Emile are incredible, in fact the second one ended way too early. Overall, though, I am happiest about the fact you are happy to keep repeating the basics (if we can call them that). As an amateur in this area (who has been studying and listening hard for two years) and a former language teacher, I understand the importance of repetition. Keep it up, the more you keep focusing on particular issues, the more information gets knocked into our (or at least my) heads. In my case, I start to build an image of how things like bonds and collateral work, but your work is what keeps refining that image and bringing it into focus. Words are great, but it's the images (or the parallels with things I can understand) the teach (at least me) at the end of the day. Kudos man, I never imagined I could get this sort of education for free.
New to macro econ and you do a fantastic job of explaining it. Also your interviews with Emil and Jeff are great!
Great stuff Alf, bravo
Any article that starts with a Minsky quote gets extra points. Minsky becomes more relevant with each passing day (which isn't a plus for the markets...)
Thanks for everything Alf! You're one of the most rational voices out there.
Thanks a lot Alf ! learning while listening to you is so cool. I thought I had a basic understanding of credit spreads market. But that was simply not the case as I realise after your podcast.
Still following you Alf , Great content cheers Frank G "Detective of Money & Politics"
Melbourne Australia
Hi Alf, I’m interested in learning as much as possible about the inner workings of the financial markets—the role of the repo market, the “shadow banking system,” the extent to which pension funds and corporate buybacks move the stock market, the exact amount of leverage in the system and its ramifications, etc. It’s so difficult to find any information that details the various constituents that make up “the market,” how big of a role each one plays, and how they interrelate. For example, only recently, because of an interview I happened to come across with Brian Reynolds, did I discover that individual active managers make up only a tiny fraction of “the market,” and that pension funds and corporate buybacks are almost entirely responsible for the roaring bull market over the past 10+ years. Where can I learn in depth about these topics? Your articles are fantastic and have helped me immensely.
Great piece. Alf continues to democratize institutional content…
Alf - you are the man! Found you via Eurodollar Uni and Blockworks - where have you been the last few years of my life!?!? Thank you for making your content and knowledge freely available - it is incredibly useful to this outsider/amateur. I appreciate you very much and can't wait to go through your back catalogue!
I do have question though - would it also be valid to monitor to watch Investment and High yield corporate spreads via the FRED series?
I follow these two:
https://fred.stlouisfed.org/series/BAMLC0A0CM
https://fred.stlouisfed.org/series/BAMLH0A0HYM2
EU 29s trade about flat to AFLBNK (French agency) 29s. AFLBNK is a 20% risk weight name. EU is 0%. AFLBNK is comparatively much more illiquid than EU, which is maybe the most liquid name in the government related sector. So is it about liquidity/regulations or about OAT ASW? Where does KFW trade today vs where it traded at the time of this post? Have any regulations changed and/or is it harder to buy KFW?
Did you publish on the asset swap spread ? Cannot seem to find that component