Back in September I passed along the news that there had been a peculiar spike in the overnight repo rate, the interest rate that banks charge each other for overnight loans of cash. On September 16, right at the end of the trading day, there was suddenly a huge unfilled demand that produced a massive spike in the repo rate from 2 percent to about 10 percent. The Fed stepped in with an injection of cash the next morning, and calm was restored to the market:

So this all had a happy ending. Or did it? At the time, the Fed blamed the spike on “technical factors,” mainly the fact that corporate tax payments were due on the same day that Treasury auctions settled. This produced a sudden need for cash at a time when cash reserves happened to be a little lower than usual.

But here’s the thing: if that were the case, the Fed would have stabilized the market once and that would have been it. In reality, the Fed has continued injecting cash into the repo market continuously for the past three months. Here’s the latest:

The New York Fed added $56.45 billion in short-term liquidity to the financial sector Friday to get markets through the weekend….The Fed has been intervening in markets in the current fashion since mid-September, when short-term rates unexpectedly shot up on a confluence of factors, the biggest of which stemmed from corporate-tax payments and the settlement of Treasury debt auctions.

Fed interventions have calmed markets considerably, even though there remains significant uncertainty about what will happen over the turn of the year, when money-market pressures are expected to rise up, although no one knows by how much….Yet anxiety remains. Ian Lyngen, a market strategist with BMO Capital Markets, told clients in a note that “in spite of the massive scale of this liquidity provision, the year-end turn is still trading around 4%, which is disconcerting and speaks to the level of angst on funding desks.” That said, he reckons the Fed’s latest move should help: “If there was any doubt as to whether the Fed would do everything they could to pump the system full of reserves, [Thursday’s announcement] should calm those fears, even if the regulatory constraints remain.”

Why the continued need for cash? Short-term technical factors can hardly account for it. But here’s one thing to think about: the Fed’s interventions are relatively small compared to the whole repo market, amounting to maybe 5-10 percent of the total. But what are the odds that the overnight repo market would consistently be just 5-10 percent short of demand over a period of months?

I Am Not A Banker, but the odds seem slim to me. A more likely explanation is that the repo market is working fine—for most people, anyway. But there are a few borrowers who are in such parlous shape that no one wants to loan them money for even 12 hours, and it’s these borrowers that the Fed is propping up in hopes that they’ll get their act together and we can avoid any big bank or money market fund failures.

But this is just noodling on my part. No one else seems to be especially worried about this, and perhaps there really is just some glitch in the repo market that’s basically technical in nature and will take a while to fix. Stay tuned.

Sure, Jon Hamm looks like a lecherous FBI agent who might trade information for sex. But whose part is he really playing?Starmax/Newscom via ZUMA

Clint Eastwood’s new movie, Richard Jewell, about the man who was falsely accused of planting a bomb at the 1996 Olympics in Atlanta, has gotten generally good reviews from critics but has come under fire from journalists and feminists for a scene in which a newspaper reporter offers to sleep with an FBI agent if he’ll tell her the name of their suspect. It’s such a tired—and tiresome—trope. But aren’t there two sides to this? What about the FBI agent? By chance, just as I was wondering about this, the New York Times provided a few details:

Mr. Eastwood’s film, written by the veteran screenwriter Billy Ray, follows the standard practice for movies based on real-life events by taking liberties with certain facts to speed the story along. But it uses Ms. Scruggs’s real name while giving a new one to the F.B.I. agent, raising the question of whether the filmmakers risked damaging the reporter’s reputation in their efforts to convey how Mr. Jewell lost his.

….At an awards-campaign talk in Los Angeles last month, the film’s screenwriter, Mr. Ray, said he had spoken with people involved in the case. “I will stand behind every word of the script,” he added.

There are two obvious things here. The first is that the reporter died a few years ago and you can’t libel a dead person. So there was no legal risk in using her name. The FBI agent, by contrast, is still alive and could sue for libel if he were wrongly named.

The second is that maybe the FBI agent was Ray’s source in the first place, and not naming him was part of the source agreement.

So what I really want to know now is: what’s the name of the FBI agent? And was he the source for the movie?

Why am I blogging at one in the morning? It’s the Evil Dex™, of course.

A few months ago I restarted the dex and this had very positive effects on my cancer load. Hooray! However, it’s always been the case that the longer I use it, the more sensitive I get to it. Years ago I started out at 20 mg and this has steadily decreased to 8 mg. By now even this is too much, so we addressed this by switching from 8 mg once a week to 4 mg twice a week.

This worked well at first. Thanks to the smaller dose I could still sleep on dex nights with the help of a big slug of Ambien. But that slowly gave way. Initially the Ambien gave me about six hours of sleep, then five, then four. A few weeks ago it dropped to two, which meant it was having no effect. Even without Ambien I usually snooze for a couple of hours after I’ve been up all night.

Now it’s gotten even worse: I’m literally not sleeping at all until the following night. The dex is just laughing off the Ambien.

So that’s that. I’m already using the highest safe dose of Ambien and it doesn’t work. What’s more, since I’m taking the dex twice a week, I have two sleepless nights per week as well. Blah.

I suppose I can try other sleeping meds, or perhaps some combination of a different med with a return to 8 mg of dex once a week. It can’t hurt, though I doubt it will do much good.

Anyway, that’s why I’m blogging at one in the morning.

Last week I wrote about a study showing that when police shot an unarmed black man, it affected the birthweight of black babies born nearby. The proximate cause was that shootings produced stress in the mothers, which in turn affected birthweight.

However, it turns out that there were errors in the data used by the study. The author, Joscha Legewie, describes them here. The original chart of the data is shown below on the left and the corrected chart is on the right:

As you can see, the original chart shows that nearby shootings cause birthweight to be reduced by as much as 50 grams. However, when the data is corrected the loss in birthweight is about half that and isn’t statistically significant. What’s more, the trendline for the first and second trimesters is almost identical to the trendline for the third trimester. This is suspicious since stress is known to have only a small effect on birthweight by the third trimester.

In any case, Legewie has retracted his article and, of course, I do too.

Rob Pinney/London News Pictures via ZUMA

British exit polls are virtually never wrong by more than a dozen seats or so, which means it’s almost certain that Labour suffered a crushing defeat today. Naturally, since everything is about us us us, the question is: what does this mean for us?

In particular, what does it mean that Jeremy Corbyn led Labour to its biggest defeat in decades? For those of you who haven’t been following closely, Corbyn is no neoliberal shill. He is an unabashed lefty socialist who campaigned on an unabashed lefty socialist platform. No triangulating or “Tory lite” for him. He was out to prove that Labour could win by promising the voters a soaring lefty agenda filled with taxing the rich, taking back control of privatized industries, free college, huge infrastructure spending, more money for health care, and so forth.

The result was a mind-boggling defeat. So what does this tell us about American presidential candidates like Elizabeth Warren and Bernie Sanders? You’ll probably be hearing a lot of things like this over the next few days:

From people who like Bernie and Liz: Britain is different. In particular, this election was mainly a referendum on Brexit, which overwhelmed every other topic. Corbyn was hurt more than anything else by being wishy washy on Brexit, and there’s just no American counterpart to this. What’s more, Corbyn was also hurt by Labour centrists slagging him and by smears that he was anti-Semitic. You just can’t draw any lessons for American Democrats from a British election that was so different from ours in so many ways.

From people who prefer centrist candidates: Brexit was roughly a 50-50 proposition among the British electorate, but Corbyn got less than a third of the vote. It’s pretty obvious that the vote against him was about far more than Brexit. And don’t kid yourself by listening to special pleading about smears and chaos on the left. That’s the normal stuff of elections, and American candidates will have to deal with the same thing. Corbyn lost because he was a hard left candidate, and the same thing will happen if Democrats nominate one of their own.

There’s some truth to both of these, but I suspect there’s more truth to the second one. The American and British electorates have voted quite similarly for the past several decades, putting in office Reagan-Clinton-Bush-Obama-Trump as against Thatcher-Blair-Cameron-Johnson. Given the similarities between BoJo and Trump, as well as the obvious salience of immigration politics in both countries, I’d be reluctant to blow off the British results as nothing much to worry about.

Rob Pinney/London News Pictures via ZUMA

The exit poll for the British election has just been released. Here’s the projection:

• Conservatives: 368
• Labour: 191
• SNP: 55
• Lib Dems: 13
• Other: 26

If the exit poll is accurate, the Conservatives won 56 percent of the seats in Parliament, a considerable increase over their current position. This means Boris Johnson will remain prime minister and Brexit will go forward.

This is a popcorn flower. Does it look like popcorn? I guess it does, sort of, though it wouldn’t have been my first guess.

My brain seems empty today, so here’s a look at the current Democratic primary race polling as aggregated by RealClear Politics:

Biden and Sanders continue to be rock steady. The Warren boom is over, and she’s now tied with Sanders at around 15 percent. The Buttigieg boomlet also appears to have lost steam, though he’s still at 10 percent. And Mike Bloomberg has climbed to 5 percent on the strength of a gazillion dollars worth of TV ads.

Progressives don’t want to hear this, but it’s still Biden’s race to lose as long as the lefty vote is split between Sanders and Warren.

The latest from the brain of Donald Trump:

Privately, he’s stewing. Close adviser says Trump is somewhat taken aback that his actions toward Ukraine are ultimately what led to his likely impeachment: “Frankly, I think he’s a little surprised it’s the Ukraine thing that’s done it.” w/ @kaitlancollins and @Kevinliptakcnn

— Jim Acosta (@Acosta) December 11, 2019

This doesn’t surprise me. I don’t think Trump really gets the distinction that dirt on Joe Biden is a personal benefit, not a national benefit of the kind you get during, say, a trade negotiation. To him, his reelection campaign is just another part of his presidency. So why is everyone getting so upset?

That’s Trump for you. The bigger problem is that I suspect an awful lot of the public doesn’t immediately get the distinction either, and we’ve done a poor job of hammering it home.

This is the church at Villa de Leyva in Colombia. You may read about my travails getting to this little tourist town here and here. The church itself is not really much to look at, but I like the yellow tone of the lights against the dark blue of the sky at dusk.