I admit that I watched last night’s last minute press conference hoping for something spectacular from U.S. president Joe Biden: an announcement that he was leaving the race. The first few words from his lips and I figured that Mr Biden was opting to continue on the road to the presidency. Mr Biden took the opportunity to … Continue reading It is as if the markets expected a Biden gaffe…
As of 8:39 am, at a strike price of 1.0875, the monthly call options for the EUR/USD were out of the money given the market price of 1.074. Call options on the underlying EUR/USD futures were also out of the money with futures on the currency pair quoted at 1.07655. The opposite holds for owners of … Continue reading At 8:39 am, are EUR/USD FX options out of the money?
The Federal Open Market Committee issued a decision last Wednesday to maintain the target range of its federal funds rate between 5.25% and 5.50%. For banks that need to borrow from the Federal Reserve System’s discount window, rates for this lender of last resort facility is at 5.50%. Within the interbank market, banks will continue to see … Continue reading The Federal Reserve, banking, and managing political theatrics ….
If a president can’t give you full facts about the political economy, then should she be managing it? Last week, U.S. President Joe Biden announced that “inflation was at the pre-pandemic benchmark of 2 percent over the last six months of 2023.” The problem with this statement is that if year-over-year inflation was two percent during the … Continue reading Should a president be allowed to manage the economy where she doesn’t provide actual facts?
Lineage is the framework through which I see myself in this political economy. My views on the political economy are steeped in observing my family members participate in trade. I saw members of both sides of my family in the Eastern Caribbean act as retail and wholesale merchants. Through merchant activity they brought their communities value. Value gets … Continue reading Domestic mercantilism keeps the race question out of banking …
It is tough to call the discussion on reparations for black American descendants of slaves a debate. It appears to me that any heat from the discussion is generated by the persistent dialogue amongst its supporters and a cool response from blacks who are both sympathetic but resigned to the high probability that the government of … Continue reading Reparations. Is the solution in the bond market?
The State sanctions a market for its currency and licenses private actors to buy and sell the currency. A market is a public, social program created to generate the transactions that lead to taxable revenue. Private actors participate in the program in exchange for the right to earn interest and trading income from the spreads between bids … Continue reading In the end, banks are merely privateers.
At times I think that traders and bank depositors operate in sandboxes oblivious to the rest of the playground that surrounds their play area. The media offers enough noise to distract market participants from the philosophy that orders the interaction between the State, the banking system, and transactional markets. I consider banks to be the retailer of … Continue reading The Court’s role in supporting monetary policy.
The Federal Open Market Committee is set to meet on December 12-13, 2023 to determine the target range for the federal funds rate. The federal funds rate is the interest rate at which depository institutions lend balances held either at the Federal Reserve or in their bank vaults to other depository institutions overnight. The current … Continue reading The federal funds rate: In the end, is it not about supporting the banking system?
Lawyers Write the Bets. Bankers Sell the Bets. 