It was just over a year ago when we first observed a troubling development in the global currency funding arena: the global dollar funding shortage had come back after a 7 year hiatus, and "this time it was different."
The reason for this observations was predicated in the collapse of USD basis swaps. This is what HPM said at the time:
Nikkei futures rallied post-Fed into the Japanese open (despite weakness in USDJPY) and then when trade data struck (and exposed the utter failure of competitive devaluation), everything went into freefall. The Nikkei crashed 700 points and USDJPY plunged to its lowest since QQE2...
.... which prompted us to summon the cartoon character at the head of the BOJ as follows:
YEN CLIMBS PAST 110.99 PER DOLLAR TO STRONGEST SINCE OCT., 2014. Time for Peter Panic
In a note that may have been quite prescient, BofA's HY strategist Michael Contopoulos released a note last night titled "Fed acknowledges global growth concerns… again", in which he said that "we have to admit; today’s dovish comments by Yellen took us by surprise" and adds that "although the market’s initial reaction was positive, we think the longer run impact of a very dovish message is bad for risk assets. In fact, we’re a bit amazed by the initial response from high yield today."
Yesterday when summarizing the Fed's action we said that in its latest dovish announcement which has sent the USD to a five month low, the Fed clearly sided with China which desperately want a stronger dollar to which it is pegged (reflected promptly in the Yuan's stronger fixing overnight) at the expense of Europe and Japan, both of which want the USD weaker.
ECB, BOJ don't want a weak dollar; China does not want a strong dollarFed sides with China for now
— zerohedge (@zerohedge) March 16, 2016
My friend the philosopher James K.A. Smith gave a talk the other day at the Ethics and Public Policy Center’s Faith Angle Forum. In the Q&A, the Benedict Option came up. Here’s a link to the audio clip. The Ben Op discussion comes up at shortly past the 20 minute mark.
When someone in the audience asked Jamie (as his friends call him) to comment on the Benedict Option, he asked to go off the record because he’s a friend of mine. Someone — Mike Cromartie, I’m guessing — said no, keep it on the record, because “he can handle it.”