DrStool Posted April 25, 2022 Author Report Share Posted April 25, 2022 10 minutes ago, potatohead said: Lee, Many are pointing to no Fed tightening so far (only 25 bps). However, with money not leaving RRP. Has this become the de facto tightening? You have been on this from the beginning. My guess is they will use this at some point for the stick save. Finally, no the RRP is not a tightening. Again, this is something I have tried to make clear through my reporting. The RRP fund is the Fed's version of a money market fund for money market funds, banks, dealers and other large investors, that have no place else to go with the now $1.8 trillion they've gotten back from the US Treasury when the Treasury redeemed the T-bills they were holding. You could even say that it is the opposite of tightening. It's a slush fund. A place for these fund managers to put their cash in lieu of short term T-bills. It's overnight money. It's voluntary. They can invest it on something else to the extent that their investment charters don't restrict them. A key point I made in the current report is the fact that they are electing to just sit on it is very telling about the state of the market, and the state of what they know is coming. In short, they know that they, and we, are in deep, deep shit. Tons of Cash, Not In Use, Signals this Huge Change in the Market Link to comment Share on other sites More sharing options...
DrStool Posted April 25, 2022 Author Report Share Posted April 25, 2022 In short money rates have risen about 80 basis points. They Fed will need to catch up at the May meeting or it will risk looking irrelevant. It's not irrelevant, because it's the one restricting the supply of money. That's what's important. The price of money is just the meter. Link to comment Share on other sites More sharing options...
Jimi Posted April 25, 2022 Report Share Posted April 25, 2022 48 minutes ago, DrStool said: Vive la France. So glad Macron won. Reverberations from LePen winning would have been most unwelcome. Link to comment Share on other sites More sharing options...
DrStool Posted April 25, 2022 Author Report Share Posted April 25, 2022 19 minutes ago, DrStool said: My guess is they will use this at some point for the stick save. Well, most of this cash is from money market funds, so that means that it can only be used to buy T-bills. That will suck some of the money out of the RRPs when issuance resumes. But the rest of it, the money held by managers who are able to deploy it elsewhere looks like it may sit there until hell freezes over. They have to want to deploy it. There needs to be a reason. The only way there can be a Fed "stick save" on this is if they start restricting the quantity of RRPs they make available. That will force the holders back into the money markets, pushing rates lower, and at the margin, could encourage some to go hunting for longer term paper, and even a few to look for cheap stocks to buy for income. All of that seems so far over the event horizon, it's pointless to speculate on it. The black hole comes first. Link to comment Share on other sites More sharing options...
DrStool Posted April 25, 2022 Author Report Share Posted April 25, 2022 Just now, Jimi said: So glad Macron won. Reverberations from LePen winning would have been most unwelcome. When the Rs take control of Congress later this year, Putin wins. That's his endgame. Link to comment Share on other sites More sharing options...
potatohead Posted April 25, 2022 Report Share Posted April 25, 2022 Been on many calls over the last 3 weeks. What I find astonishing is the wealth effect from 10 years of a bull market and the the March 2020 all in by the Fed. Some very smart people have left the work force to manage their portfolios. From tech to commodities, many of these people have no intention of going back into the workforce. What is scary is if this bear market wipes out many portfolios before the next reflation, there will be a complete unwind of the wealth effect and at the same time, the jobs that no one wanted right now may not be available in the future Link to comment Share on other sites More sharing options...
DrStool Posted April 25, 2022 Author Report Share Posted April 25, 2022 The way the French system was designed, the Fascists can't realistically win control. The two rounds of Presidential voting means that the centrist will always beat the extremist. But 42% is a high number. It's consistent with the rabid right in the US. In the US, that's enough for them to take control. At this point, it spells the end of free and fair Presidential elections. The House of Representatives will choose the next President if they don't like who wins the electoral vote. The popular vote doesn't count. Doesn't matter how much of popular vote a candidate has if their party apparatchiks control the electoral machinery in enough states. Link to comment Share on other sites More sharing options...
DrStool Posted April 25, 2022 Author Report Share Posted April 25, 2022 4 minutes ago, potatohead said: Been on many calls over the last 3 weeks. What I find astonishing is the wealth effect from 10 years of a bull market and the the March 2020 all in by the Fed. Some very smart people have left the work force to manage their portfolios. From tech to commodities, many of these people have no intention of going back into the workforce. What is scary is if this bear market wipes out many portfolios before the next reflation, there will be a complete unwind of the wealth effect and at the same time, the jobs that no one wanted right now may not be available in the future Eggselent info. Many Tanks! Link to comment Share on other sites More sharing options...
DrStool Posted April 25, 2022 Author Report Share Posted April 25, 2022 Here's the 5 hr bars ES. As you can see there's a function at the junction. Link to comment Share on other sites More sharing options...
DrStool Posted April 25, 2022 Author Report Share Posted April 25, 2022 Here's how it looks on the hourly. The 5 day cycle projection is now 4200-4190. It's suggesting a bounce from here. So BOLO. Link to comment Share on other sites More sharing options...
The CoinGuy Posted April 25, 2022 Report Share Posted April 25, 2022 From my view on the perch... I'm actually just sitting here, waiting. Although, ph's comment about fresh portfolio manager meat is making me a little hungry. I'm still just waiting... Waiting? For the news. What news? The Bad News. The Bad News? Yeah. The news that's going to take us over the cliff, jump the wire, break the bands, and toss the margins. Nothing else really matters to me. Best, TCG oh...and... Who needs more information... Just thought I'd mention oil since it's taking a beating this morning. It had been been pushing up against long-term resistance at 1600 in the ^XOI. Link to comment Share on other sites More sharing options...
The CoinGuy Posted April 25, 2022 Report Share Posted April 25, 2022 Facebook. When you take a look at the chart and I'll be dissecting it this week. Please remember the other charts I've posted. 1x/1x when you GAP into a formation after the plunge...you should expect a GAP out of the formation as well. NFLX is a perfect example of this. Facebook is in "pause to build cause" mode. Perhaps...they're just waiting for news too? A couple of questions. What did Facebook do right before it gapped down? Might want to take note of that. Notice the twin peaks at the top of the formation. Have you seen this before? When it's all said and done...you'll not want to see this ever again. Best, TCG oh...and... If I said... PYPL is leading NFLX is leading FB is leading AMD(and NVDA) is leading MSFT is leading the Nasdaq...it might make sense is some strange way? Almost like a Choo-Choo train into a...into a...black hole as Doc put it? Link to comment Share on other sites More sharing options...
DrStool Posted April 25, 2022 Author Report Share Posted April 25, 2022 Had a 1.06 handle on the euro briefly. Link to comment Share on other sites More sharing options...
DrStool Posted April 25, 2022 Author Report Share Posted April 25, 2022 37 minutes ago, DrStool said: Here's how it looks on the hourly. The 5 day cycle projection is now 4200-4190. It's suggesting a bounce from here. So BOLO. Up 40 since I posted that. Link to comment Share on other sites More sharing options...
Jimi Posted April 25, 2022 Report Share Posted April 25, 2022 28 minutes ago, potatohead said: Been on many calls over the last 3 weeks. What I find astonishing is the wealth effect from 10 years of a bull market and the the March 2020 all in by the Fed. Some very smart people have left the work force to manage their portfolios. From tech to commodities, many of these people have no intention of going back into the workforce. What is scary is if this bear market wipes out many portfolios before the next reflation, there will be a complete unwind of the wealth effect and at the same time, the jobs that no one wanted right now may not be available in the future Spent the weekend in LA to attend an old friend's son's bar mitzvah. Moved mainly between wealthy San Fernando Valley & wealthier Santa Monica/West LA, haunts familiar from living & visiting for decades. The wealth encountered was extraordinary. The cars... the houses... the yards.... 10-figure people are social pikers. A rich guy just-met showed my wife & me an additional house he'd recently bought - sight unseen - for over $3m. Gargantuan villas under construction, seemingly testing the limits of building codes & under the habituated assumption of an inevitable bid. I think in addition to portfolios, the impact of coastal real estate gains is also a consideration: if you purchased a house over 10 years ago in a rich zip code, you are sitting on millions & millions in paper equity gains. If you think those gains are permanent because "our house is special and someone will always want into this neighborhood at our asking or more," then you think your risk-budget can accommodate a more aggressive portfolio, which has also "worked," and thereby "confirms" one's social station and investment acumen. Can capital keep capturing the vast bulk of economic benefit and productive gain indefinitely... and simply get richer & richer? Or are they going to be subject to a Great Reset? My mom once told me about a place where she grew up in Pittsburgh up on a hill where some very the rich people lived. Locals called it "Cracker Hill," because when the Depression came, the people up there no longer could afford their massive properties and were reduced to eating crackers.... Link to comment Share on other sites More sharing options...
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