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We Have Yet To Pay The Ultimate Price of Bernanke's Heinous Crime 3/2/21

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Live, at 4 AM in New York, it's Tuesday Morning. What's on sale this week? This morning, everything. 

The ES fucutures fell just a bit outside of the end of day 5 day cycle projection of 3975. The longer moving average that I use to run those forecasts made a right turn shortly after the close yesterday.  Oh well. These things do happen.  

But, in the immortal words of Blutarsky, it ain't over till it's over. At the moment the ES has fallen to an ancient support line converging with a couple of downtrending support lines at 3867. If this holds, no doubt we'll see yesterday's high tested. 

Click to engorge

If they break this, then the next targets would be support levels aaround 3856, and 3844. 3850 would be a 50% retracement of yesterday's rally. If they break that, there's a good chance of testing the low, or worse. 

I'm leaning toward a bullish resolution because of the thing with the Treasury pumping $55 billion into the market today and Thursday. There may be more where that came from with the new weekly T-bill announcement coming out later this morning. I'll keep an eye on that for you. 

As I wrote last night:  

12 hours ago, DrStool said:

Reminder- $55 billion in T-bill paydowns hit tomorrow and Thursday. Market successfully handled the settlement of $139 billion in new coupon paper today. The pressure from that came last week. The T-bill paydowns clearly have helped ameliorate, with excess cash going to... where else! Stonks!  

Janet, like Sal Minichin before her, is a genius. 

Much respect to Madam Yellen, who does not get credit for the good things she tried to do when she was Fed chair. We love to criticize her, but to this day, she's the only modern Fed chair to try to, and actually did, shrink the Fed's balance sheet. As a famous bard once said, "The evil that men do lives on. The good is oft interred with their bones." 

Yellen's was an effort doomed to fail. Bernanke, that vicious monster responsible for the financial mass murder of millions of US elderly savers,  set out to trap future Fed chairs by making QE impossible to reverse.

He succeeded. The financial system is now completely dependent of Fed QE life support. It can never be removed, and probably can only be reduced modestly when the US economy booms enough to cut the deficit and reduce debt issuance. 

We've seen some social fallout from permanent QE and the moral hazard and ever widening wealth gap it promotes, but we have yet to pay the ultimate price. That's coming. 

As I complete this message of love, forgiveness, and compassion for you, and my millions of followers (ok, dozens), I'll leave with a zoomed in 30 minute bar chart of this morning's action.


We see a holding action at the sport level I mentioned above. Is this a tag and go? My guess is yes, because check out the channel I just noticed! Meanwhile, New York is still asleep. Some institutional guys will have Treasury cash coming in today, and you know how money burns a hole in their pockets. They'll wake up, hit their screens, and be in the mood to spend. 



To post your observations, and snide, but good-natured, comments, click here to register. Be sure to respond to the confirmation email which is sent instantly. If not in your inbox, check your spam filter. 

Meanwhile, here's some free stuff I've written about this unfolding catastrophe. 

US Treasury Injects Another $30 Billion Into Market


Treasury Announces It Will Inject ANOTHER $25 Billion For $125 Billion Weekly Total

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The great thing will be that everyone can make it, and it doesn't require electricity.  Just fiber. 

This snippet from the 2/27 Liquidty Trader

"But oddly, dealer cash accounts rose by more, and Treasury cash fell by more, than what we can account for with these paydowns, and the other things we know about, like MBS settlements. It appears that there was a direct shift of funds from the Treasury to the dealers that was outside these channels."

vs my musings and your response 2/19

There is no way they will allow this thing to deflate.  If the PD's or bigger players are in trouble then I think we are at the point where the Fed and all the institutions will cheat.  Go off balance sheet.  How? I've got no clue. 



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The Treasury could make direct loans that are paid back from the weekly proceeds of the bill paydowns. They loans would not be outstanding long enough to be reported. Or they may be reported, and no one will notice because no one is looking for it. In theory, even an overnight loan should show up on the daily Treasury Statement. 

This is all so new, it's good to do some thinking out loud. 

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Treasury announced another $25 billion paydown for next Tuesday settlement. This is a regular thing now. Looks like $55 billion some weeks, $96 billion once a month. That is serious coin. 

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Today's pattern is more likely to be a consolidation than a reversal pattern. The 5 day cycle projection is back up to 3965. 

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The great thing will be that everyone can make it, and it doesn't require electricity. 

Just fiber. 

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38 minutes ago, DrStool said:

The great thing will be that everyone can make it, and it doesn't require electricity. 

Just fiber. 

That must be a comment for the over 50 crowd......

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