Category: Cryptocurrencies

Bubble? UMich Buying Conditions For Houses (Good) Collapses To 32%, Fed O/N Reverse Repos Breach $1 Trillion

The University of Michigan survey of consumers is out and their buying conditions for housing (good) was a disasters. Only 32% on consumers view buying conditions for a house as good. That means that 68% think buying conditions are not good. Why? With the Case-Shiller National Home Price Index growing at a scorching 16.6% YoY making housing simply unaffordable for many Americans.

On a different note, The Fed’s overnight reverse repo facility (aka, the slosh” just breached the $1 trillion mark.

Then we have this tantalizing headline on Bloomberg: “Traders Pile Into Tail-Risk Bets That Fed Won’t Hike at All”.

Treasury yields are rising amid optimism over the global recovery but there has been a run on Eurodollar options betting the Federal Reserve will opt not to raise interest rates at all.

Traders this week have been busy snapping up Eurodollar call options on underlying March 2025 futures that target three-month Libor to fix below 0.5%. These pay off if markets price the Fed keeping its benchmark at its lower bound until then. Futures markets are currently anticipating Libor will rise to about 1.47% by the first quarter of 2025.

So, it looks like The Fed (aka, Greenman) may not be going anywhere.

Have a wonderful weekend!

Alarm! Gold And Cryptos Rise As Covid Spreads (Again)

The Covid Delta Variant seems to be picking up steam, we are seeing “flight to safety” assets other than Treasuries rising.

Gold and Silver experienced some serious corrections last week, perhaps because things were looking up. Then we saw Anthony Fauci scaring everyone about Covid … again. So, there is enormous uncertainty about how this will play out. In other words, ALARM!

Bitcoin and Ethereum have been climbing since Gold and Silver corrected last week. But both are up this week, particularly Gold.

The US Dollar is down slightly since the same time last year and M2 Money Stock growth has slowed.

Here is a chart showing another fear factor: the rise of the Covid Delta Variant. Deaths are only 1.7% of confirmed cases (if we believe the actual cause of death).