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Eurodollar University’s Making Sense; Episode 26, Part 2: If We Keep Seeing July, What About September and Beyond?



















Jeff Snider, Head of Global Investment Research for Alhambra Investments with Emil Kalinowski, a professional gentleman of leisure in no need of unemployment insurance. Artwork by David Parkins. 
26.2 Capital Market Bottleneck: DEAD AHEAD!
Capital market seasonality is popularly assumed to be a phenomenon of the past; a quirk of an agricultural, bygone era. Not true! It still exists. And the calendar’s biggest capital market bottleneck is dead ahead: September.


How much is several? What is a few? If you were to put a numerical value on “probably” would it be more, or less, than “likely”? To your podcaster’s great consternation the linguistic gatekeepers of Middle English were rather disinterested. As a result we’re constantly late or early. ‘I thought we were to meet in a few hours, no?’ ‘No! It was several.’ ‘Oh, right.’ Women seem to revel in these nuances, arriving for a date with this podcaster when it pleases them and then claiming etymological immunity.

Which brings us to the word transitory. Admittedly there is SOME lexicographic nuance: momentary, transient, impermanent, temporal. However, the Federal Reserve – like the proverbial camel – stuck its thesaurus-nose into that nuance and CHARGED into the economic-tent of the past decade. Why did the 2009-10 Green Shoots recovery fail? Transitory European Sovereign Debt Crisis, gummed Bernanke. Why did the economy swoon in the first quarter of 2014? Transitory Polar Vortex, chomped Yellen. Why did inflation not accelerate despite ‘full-employment’? Transitory cellular data-plan price war, gnawed the FOMC. Why was Globally Synchronized Growth tripped up? Transitory political trade wars, chawed Powell.

So here we are, 10 transitory-filled years later. Now, unless there are glaciers listening to this podcast – and it needs all the ratings assistance it can get – it’s likely the audience is in unanimous agreement that the definition of “transitory” has been tortured to death. Indeed, the Federal Reserve agrees! And Transitory has been retired. Or cremated. Still, instinct informs your podcaster that much like our zombie economy, the transitory excuse is undead and will walk again!



00:05 Capital flow seasonality, not merely a historic phenomenon, calendar bottleneck dead ahead
03:40 What is the oil supply situation in the United States?
05:00 West-Texas oil futures are in contango – still! What are the economic implications?
08:01 Crude oil and gasoline inventory levels in the US are quite high – there’s too much of it!
09:11 Risk aversion – the conceptual link between capital seasonality and a declining oil market
10:23 The Japanese yen is another market that’s glowing orange – a monetary warning
15:36 Treasury bill yields are not signalling disorder; credit spreads are no longer improving


COT Black: Closing In On Mid-September, What About Oil?:
Bottleneck In Japanese:
New York Clearing House Banks Monthly Movements of Cash to and from Interior (1905-1908):
Alhambra Investments Blog:
RealClear Markets Essays:


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