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Ask Not What Your Fed Would Do To You, Ask What You... 9/30/22

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13 hours ago, bob osso said:

So Doc, does that mean there was no one at the FED (or their seconds) hinting to these guys that they were waaay on the wrong side of what they were planning to do? I mean, if guys are all in cahoots, letting them blow up seems pointless if they're gonna get a bailout anyway. Why not head it off before it gets there? Or was that the plan all along somehow?

Honestly, I try not to think about the Fed's motivations, or what they might do.  Or why the Primary Dealers do what they do.

I think about what they do do. ...





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Sorry I couldn't resist.   

And now, back to our regularly scheduled programming. 

Here's the hourly chart of the ES, 24 hour S&P futures. It's gravitating toward the upper portion of its downtrend channels, and the lower portion of its uptrend channel. I mean, I just have nothing intelligent to say about this. 

What else is new?

So, we wait for the market to tell us something. 


Meanwhile, back at the big picture:

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So the UK government decides to go chapter 11 even more quickly than it was...(or is that IMF program...so 70's isn't it...)

So the GILT bondholders finally realise they are the bag holders....

What took them so long??????

Anyway now "forced" QE....

Seems like a nice future template for the USA.......

"Forced QE"

"You save us or we blow up the bond market" 

It worked so well in Sept 2019.

Why should'nt it work again?????

Yes we live in an age when blackmailing central banks is the path to wealth and riches......


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1 hour ago, Jimbo said:

The simple fact is over the last 10 years the bondholders have been fattened for the slaughter by feeding them all the low rate corn they wanted......

Then in 2022 the FED took out the axe............

There is now a mathematical limit to what the Fed can do before causing a debt crisis. A debt crisis that was over two decades in the making.

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I beg to differ

The FED will have to pivot at some point to save the bond market....just look at the UK......

This will mean inflation and soft default and eventually higher rates....

The market is anticipating this....more printing.....

Hard default will not be allowed by the FED as it will be too catastrophic....

Its quite happy to see the greater fool assets...SPACs, Crapto, memes etc lose all their value.....

But it wont allow large scale corporate default..... 

It will draw a rate line in the bond market sand and defend it.......

Where is that line and when it is reached will tell you when QE6 starts.....


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13 minutes ago, sandy beach said:

Federal government current expenditures: Interest payments.


Pretty soon it will be a trillion. That's $80 billion a month added to the defecate. $80 billion a month in additional Treasury supply. $80 billion a month that the market will be forced to absorb. 

Catastrophic. The clock is ticking for Fed monetization to resume. They're waiting for hard evidence of disinteryflation. 

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