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LEE'S FREE THINKING

Fed QE Not QE Starts at $80 Billion Monthly, Plus TOMO- The System Is Burning Down

by Lee Adler •  • 0 Comments

Call it what you will, the Fed has started the new QE. It’s coming fast and furious with POMO on top of POMO that will grow the Fed’s balance sheet as fast as it did under old QE. It’s a sign that the house is on fire.

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Lee, can you offer a wild assed guess what percent of the deficit of the period through "spring", say June, that the QE will be.   With the heaviest issuance out of the way on a seasonal basis, and with the refunding off the debt ceiling now mostly done,  might not the Fed be covering the entire deficit for the 'till spring' period?

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57 minutes ago, DrStool said:

LEE'S FREE THINKING

Fed QE Not QE Starts at $80 Billion Monthly, Plus TOMO- The System Is Burning Down

by Lee Adler • October 11, 2019 • 0 Comments

Call it what you will, the Fed has started the new QE. It’s coming fast and furious with POMO on top of POMO that will grow the Fed’s balance sheet as fast as it did under old QE. It’s a sign that the house is on fire.

excellent article

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3 hours ago, Jorma said:

Lee, can you offer a wild assed guess what percent of the deficit of the period through "spring", say June, that the QE will be.   With the heaviest issuance out of the way on a seasonal basis, and with the refunding off the debt ceiling now mostly done,  might not the Fed be covering the entire deficit for the 'till spring' period?

For the first few months, they'll cover most of it. I can't give an exact percentage, but a wild guess would be 60-80%.  The T-bills would start to roll over next  month, if they buy bills across the 4 week to one year spectrum. As more bills start to roll, they'll need to increase the total purchases to absorb new paper. By this time next year, they could be rolling everything, and adding another $60-80 billion per month. The Fed would own almost all new issuance, similar to the BoJ.  

This is a disaster in the making. But will it be for the bulls or the bears? Watch the weekly charts of both stocks and bonds. 

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1 hour ago, DrStool said:

For the first few months, they'll cover most of it. I can't give an exact percentage, but a wild guess would be 60-80%.  The T-bills would start to roll over next  month, if they buy bills across the 4 week to one year spectrum. As more bills start to roll, they'll need to increase the total purchases to absorb new paper. By this time next year, they could be rolling everything, and adding another $60-80 billion per month. The Fed would own almost all new issuance, similar to the BoJ.  

This is a disaster in the making. But will it be for the bulls or the bears? Watch the weekly charts of both stocks and bonds. 

I just mention it because putting it into the context of monetizing a majority of the Federal deficit,  a correct context but of course there are others, is a way to get the uninformed to understand it in a way they can understand it. 

It has to be understood that all this new talk of "reserves" and "adequate reserves" is a rhetorical trick. It's technically accurate and provides zero information to most people.

Imagine the uproar if someone would ask Powell why he is monetizing most of the deficit and how he feels about that.

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5 hours ago, MisFit Kid said:

They are fully committed to the Central Bank fraud.......They will never stop.......

but lets not call it fraud.......

 

Not-ducks.jpg.3594f333bb2c4344e401155ae329a4fd.jpg

It isn't fraud functionally. It's rhetorically fraudulent, now especially with the shiny new emphasis on "reserves".

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At least they got the yield curve to normalize, or damn close.  I suppose that is one goal of going all nuts on the short end.  I am certain they think if they can eliminate the recession signal of the inverted curve then they can stave a recession off.   Ye olde confidence game.  As if treating the symptom cures the disease.

 

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2 hours ago, DrStool said:

The piece I wrote Friday seems to be going viral.  Praise the Load! 

You should publish your Free Thinking pieces on pages that have no commercial links to Examiner or Examiner pages.  

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9 minutes ago, Jorma said:

You should publish your Free Thinking pieces on pages that have no commercial links to Examiner or Examiner pages.  

🤓Darling, how do you propose that I make a living?  I'm too old to sell my body.  A travel blog,  perhaps?

Yeah. That's it!  😄  

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25 minutes ago, DrStool said:

🤓Darling, how do you propose that I make a living?  I'm too old to sell my body.  A travel blog,  perhaps?

Yeah. That's it!  😄  

Just the Free Thinking pieces?  There is an inherent contradiction between free and commercial.

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