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T-bill Rates Are Skyrocketing as Stocks and Bonds Tank Because 6/15/22

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T-bill rates continue to show the Fed that it must raise the Fed Funds rate 100 bp if it wants to keep pace with the reality of the market. 

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11 hours ago, Jorma said:

So why exactly are $2.2TN  sitting in RPP's at .5% when 90 Day bills are at 1.74?   Now personally I think the USA may be a dodgy proposition in coming years but 90 days?

RRPs are overnight money. MMFs have their very short term (VST) T-bills called away. They turn that cash over to the Fed for their next day and VST money management needs. At the same time, banks and dealers are short of cash. The value of their highly leveraged holdings are collapsing.

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They are being forced to liquidate paper across the maturity and quality spectrums, including longer dated bills, as they get collateral calls. They can't bid on the longer duration bills remaining in the market. 

Meanwhile, the 5 day cycle in the ES 24 hour S&P fuguetures has been in an up phase since Monday evening. That does not bode bullish for what happens after 2 PM today. 

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Meanwhile meanwhile, the ECB is already holding an emergency meeting. Makes me wonder if the Fed won't be forced to reverse course and re-start QE with a massive injection sooner than I thought. 

Dealers Assume the Position, as 75 100 BPs Coming Wednesday

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Over on Crypton- Jor El is not doing well. As you know, the long term measured move target is 5000 below zero which Stoolie Jon Law explained admirably. 

21 hours ago, JonLaw said:

5000 below zero is its actual intrinsic value. That's because BTC is the only fake money that takes a ton of energy to maintain. It's as though instead of Monopoly having paper money, it had battery powered electric money that you had to keep plugged all the time or the denominations disappeared.

Mining bitcoin is like mining gold, except that instead of ending up with gold, you end up with a higher electric bill. 

On the daily chart, serious technical analysis results in a 1 year cycle projection of 12,000. 

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1 hour ago, DrStool said:

Makes me wonder if the Fed won't be forced to reverse course and re-start QE with a massive injection sooner than I thought.

I shudder at that prospect & what it would imply. The capitulation to plutocracy in 2007/08 perhaps sealed our financial fate: it was the last chance to require consequence of risk. Now the debt load is only larger, and the necessary price to be paid only greater, and the breadth of fallout will only be wider. Perhaps they can jam another set of QE pennies into the fusebox for another cycle, but doing so “solves” nothing. Rather, it forestalls everything just a little longer. It’s just horrible what policy has understood of “the public interest.”😢

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ECB’s statement:
🤔🤔🤔

15 June 2022

Today the Governing Council met to exchange views on the current market situation. Since the gradual process of policy normalisation was initiated in December 2021, the Governing Council has pledged to act against resurgent fragmentation risks. The pandemic has left lasting vulnerabilities in the euro area economy which are indeed contributing to the uneven transmission of the normalisation of our monetary policy across jurisdictions.

Based on this assessment, the Governing Council decided that it will apply flexibility in reinvesting redemptions coming due in the PEPP portfolio, with a view to preserving the functioning of the monetary policy transmission mechanism, a precondition for the ECB to be able to deliver on its price stability mandate. In addition, the Governing Council decided to mandate the relevant Eurosystem Committees together with the ECB services to accelerate the completion of the design of a new anti-fragmentation instrument for consideration by the Governing Council.

 

 

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Just now, Jimi said:

the uneven transmission of the normalisation of our monetary policy across jurisdictions

Pro-tip: substitute “differentiation” for all these words. 

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THE PATH OF LEAST RESISTENCE

Its always about the path of least resistence.

(One of my favourite laws of economics and physics and human nature).

What are the Central Banks path of least resistence.

More printing and more inflation.

They exist to bail out the borrowers and asset values.

All that debt has to be made safe for democracy.

Of course this is poison for the bondholders.

Only now do the bondholders "Get It".

But they should bave realised that a long time ago and sold up.

Debt holders have been undercompensated for at least the past 5 years.

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7 minutes ago, DrStool said:

WTF does that ECB statement even mean? 

Glad I don't live in Europe...

 

Oh, wait... 

Seriously, right?!

There was some old joke I can’t remember whose punchline was that it was created by an EU bureaucratic committee in Brussels.

That statement reminded me of that. 

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