We're about to explore the Bermuda triangles of the market. So hang on tight.
There are… curious things happening in global markets - things that seem to fly in the face of traditional financial understanding. We delve into three of them and try to understand what's going on underneath the underneath.
1. Corporate bond inventories are negative
There's a lot of worry about corporate bond inventories, which have turned negative. See, the Federal Reserve trades securities directly with certain designated parties, called primary dealers. These primary dealers include banks and other broker-dealers and they act as market makers for the Fed, buying and selling securities and making them available to their clients.
So what's the big deal about negative debt inventories? Well, while a negative level of debt is actually common for U.S. Treasuries (government bonds), this is the first time since we've been keeping data on this… Read More …