Why does the Japanese government keep intervening trying to prop up the yen, and why does it keep failing? This isn't just about the yen or Japan, nor is it completely a matter of what's unfolding right now. There is a deeper truth that needs to be made more widely which applies universally to monetary systems around the world. And the yen's crash is the clearest example.

Eurodollar University's conversation w/Steve Van Metre

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There was an unnoticed yet absolutely critical detail in the June CPI report that pointed to a lot more than just benign disinflation, a development that has only rarely been observed in decades of history. More disturbing still, the context behind this one is consistent with those few past instances including a few new pieces of subsequent information.

Eurodollar University's Money & Macro Analysis

FOMC Transcript April 2010
https://www.federalreserve.gov/monetarypolicy/files/FOMC20100428meeting.pdf

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The June consumer price estimates at first seemed like good news. Two months in a row at low and now negative changes. But these past two months have shown a little more weakness than most had bargained for, instead so many of the details consistent with recession indications spilling out from all over the economy. No wonder bond yields dropped sharply, though, alarmingly, swap spreads got there well before today.

Eurodollar University's Money & Macro Analysis

BLS June 2024 CPI
https://www.bls.gov/news.release/pdf/cpi.pdf

Bloomberg Stocks See Big Rotation as Yields Sink on Fed Bets: Markets Wrap
https://www.bloomberg.com/news/articles/2024-07-10/stock-market-today-dow-s-p-live-updates

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Chinese authorities are becoming increasingly desperate over their inability to stabilize any of the economy, banking system, or markets. CNY keeps going down, as does the economy. Banks in China aren't lending while dozens are now 'disappearing.' Safety/liquidity of government bonds makes perfect sense. Not to the PBOC which is going to be shorting it by hundreds of billions and this is why.

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Bloomberg Closer Yen, Yuan Correlation Is Danger Sign for Asian Currencies
https://www.bloomberg.com/news/articles/2024-07-10/closer-yen-yuan-correlation-is-danger-sign-for-asian-currencies?srnd=economics-v2

X Video showing Jiangxi Bank 'protest'
https://twitter.com/BitcoinNewsCom/status/1810456112652779538

The Economist Why Chinese banks are now vanishing
https://www.economist.com/finance-and-economics/2024/07/04/why-chinese-banks-are-now-vanishing

Bloomberg China Merges Hundreds of Rural Banks as Financial Risks Mount
https://www.bloomberg.com/news/articles/2024-01-31/china-merges-hundreds-of-rural-banks-as-financial-risks-mount

Bloomberg China's PBOC Readies Multibillion-Yuan Pool of Bonds to Sell by Tapping Major Banks
https://www.bloomberg.com/news/articles/2024-07-05/pboc-readies-hundreds-of-billions-of-yuan-bond-sale-capacity

CNN Chinese government bonds are on fire. That’s ringing alarm bells in Beijing
https://www.cnn.com/2024/07/03/business/china-bond-market-bank-crisis-svb-intl-hnk/index.html

China NBS June 2024 CPI
https://www.stats.gov.cn/sj/zxfb/202407/t20240710_1955508.html

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From 'strong and resilient' to 'uh oh' in a heartbeat. The unemployment rate has intruded itself on the soft landing narrative, forcing a near-total rethink of the situation all across the mainstream. Some major bank strategists are now calling for aggressive rate cuts from the Fed at the same time the yield curve is beginning to flash bull.

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Fed Chair Powell testimony (courtesy CBS News)
https://www.youtube.com/watch?v=Og8W_VK1gMM

Fed Chair Powell prepared remarks before Congress
https://www.federalreserve.gov/newsevents/testimony/powell20240709a.htm

CNBC The Fed is ‘playing with fire’ by not cutting rates, says creator of ‘Sahm Rule’ recession indicator
https://www.cnbc.com/2024/06/18/economist-sahm-who-devised-recession-rule-says-the-fed-is-playing-with-fire-.html

Fortune The Fed could slash rates by 200 points over 8 straight meetings as the economy heads for a sharper downtrend, Citi says
https://fortune.com/2024/07/07/fed-rate-cuts-outlook-200-points-economy-sharper-slowdown-citi/

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Political turmoil in Europe is very easy to understand. The European economy is supposed to be recovering from its unofficial recession, and yet the most recent data shows instead alarming (re)acceleration to the downside in a number of places. Realizing this means the path to clawing back some of the supply shock's price increases is disappearing, voters are simply voting accordingly.

Eurodollar University's Money & Macro Analysis

Pew Research Center Economic ratings across 34 countries are more negative than positive
https://www.pewresearch.org/short-reads/2024/06/07/economic-ratings-across-34-countries-are-more-negative-than-positive/

World Bank Global trade has nearly flatlined. Populism is taking a toll on growth
https://blogs.worldbank.org/en/voices/global-trade-has-nearly-flatlined-populism-taking-toll-growth

UN Trade and Development Global economic growth set to slow to 2.6% in 2024, just above recession threshold
https://unctad.org/news/global-economic-growth-set-slow-26-2024-just-above-recession-threshold

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Unemployment in the US is now steadily moving higher. The June 2024 employment report contained more substantial downward revisions, evidence more employers are cutting hours, and most concerning is another increase to the unemployment rate. And, contrary to many claims, it's not the "good" kind of rising unemployment.

Eurodollar University's conversation w/Steve Van Metre

BLS Employment Situation Summary June 2024
https://www.bls.gov/news.release/empsit.nr0.htm

Bloomberg The US Economic Slowdown Is Looking More Threatening
https://www.bloomberg.com/opinion/articles/2024-07-05/us-jobs-report-economic-slowdown-is-looking-more-threatening

FOMC June 2024 Minutes
https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20240612.pdf

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According to multiple recent reports, banks are very quietly selling out of CRE positions. Those reports are backed up by banking data which clearly shows an inflection in systemic loans in the space. Combined, we have strong evidence showing the second stage of the CRE bust has now started.

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Reuters Big US banks withstand Fed's commercial real estate shock scenario
https://www.reuters.com/markets/us/big-us-banks-withstand-feds-commercial-real-estate-shock-scenario-2024-06-26/

Federal Reserve Stress Test Results 2024
https://www.federalreserve.gov/publications/files/2024-dfast-results-20240626.pdf

NYT Office Building Losses Start to Pile Up, and More Pain Is Expected
https://www.nytimes.com/2024/06/06/business/office-building-foreclosures-losses.html

NYT Fearing Losses, Banks Are Quietly Dumping Real Estate Loans
https://www.nytimes.com/2024/06/24/business/commercial-real-estate-loans.html

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