Communicating with animal spirits in markets for @FTAlphaville. Opinions mine, etc. alex.scaggs[at]ft[dot]com

TRACE, but for Treasuries — Regulators' plan to collect data on trading in Treasuries is starting to take shape. Of course, what's still unclear is whether the public will be able to see that data as well. This month, a Wall Street self regulator proposed a rule that would require broker-dealers to report Treasury-market trades to regulators daily on its corporate-bond data-collection engine, known as TRACE.

Benign neglect of NIMs in the US — Central bankers in Europe have been thinking a lot about The Death of Banks lately. Not so much in the US. There's good reason for that, of course. Europe has been bleeding out banks with negative rates, so policy makers there have become painfully aware of the banks' role implementing monetary policy.

If you’d rather see the apocalypse happen than agree with Bill Ackman… — John Hempton of Bronte Capital has good news for you. Hempton, an avowed Herbalife bull, is sceptical about whether any inventory loading happened at the company. When a firm requires its distributors to buy lots of inventory, it's one sign of a pyramid scheme, which grows by recruiting distributors instead of actually selling products.

It’s not just non-performing loans… — Mario Draghi on banks and monetary policy transmission from the ECB's press conference today: You're right, banks are important, especially important for the euro zone, which is basically a bank-based economy where the credit intermediation goes mostly through the bank lending channel. Bank equities in the aftermath of the Brexit were especially hit.

US political party platforms might matter this year? — A little bit, possibly, for the financial industry. The main evidence for that can be found in the last-minute addition of a populist proposal to the Republican party platform adopted officially yesterday: "The Dodd-Frank law, the Democrats' legislative Godzilla, is crushing small and community banks and other lenders.

I will build a great, great (note about Trump’s) wall

Liquidity regulations could help Fed policy transmission, or maybe just non-bank lenders — Obvious statement: Banks are crucial for the transmission of monetary policy into the US economy. Not-so-obvious theory: Bank lending might become more important in that transmission because of post-crisis liquidity requirements. This one is interesting because it comes straight from the blog of the New York Fed, the guys in charge of US monetary policy implementation.

The Fed’s FX swap facilities have been quiet… too quiet? — One interesting quirk of the post-Brexit market mess has been the lack of any mad dash for emergency dollar liquidity -- so far, at least. Since the referendum, the use of the Federal Reserve's foreign-exchange swap facilities, meant to help global banks in need of dollar funding, has been "dwarfed" by previous periods of global market stress, according to a Tuesday note from Citigroup analysts.

The next wave of news on the US earnings recession starts today — Things have been grim in London, but US jobs growth was strong last month and the S&P 500 has hit a new record high, so folks in New York can relax, right? Ha, just kidding. Earnings season unofficially kicks off today with Alcoa's report, and once again, the outlook for the quarter isn't pretty.

Dark liquidity, lit formulas and IEX: A primer on paranoia — Sunlight might be the best disinfectant, but it sure does make traders paranoid. For the uninitiated, here's a quick summary of the generalized equity-market mistrust that helped drive the creation of IEX, a high-profile US exchange just approved last month by regulators:
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Jul 29, 2016

@kadhimshubber yeahh even a TRACE of it would help -- lulz see what I did there oh no I'm sorry that was awful

Jul 29, 2016

@kadhimshubber RIGHT? Jaw dropped when I heard Jerome Powell say it took several months to get data from flash crash (in yields)

Jul 29, 2016

Wowza. 🔥🔥🔥 from @kadhimshubber on the return of Powa's Dan Wagner: 

Jul 29, 2016

RT @Neil_Irwin: Inventories subtracted 1.16ppt from GDP, so add that back in and you're at basically the forecast.

Jul 29, 2016

@Charles_Peligro eh not sure if there's anything being hidden? But the papers I cited say that spreads tend to narrow w data reporting...

Jul 29, 2016

Just reminding everyone that there's still no public transaction data in the Treasury market:  v @FTAlphaville

Jul 29, 2016


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