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US Traders Wake Up to Overnight Selloff and BTFD, As Trained

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6 minutes ago, Jimi said:

Euro strength a function of dollar outflows to bolster balance sheets after CS this weekend?

Long term perspective. 


Over time, I think it's about who's printing more versus the other Past 3-4 months the Fed has been easier than the ECB. But will it stay that way? 

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7 hours ago, DrStool said:

13 week bill rate was below Fed Funds on Friday. Backed up to it today. If Fed raises even a quarter, it will be out of step with the market. It has been playing catchup for the past 15 months. 

Honestly, I have no fucking idea what they'll do, and neither does anyone else who isn't God Man Sacs or some other Primary Dealer. I guess it all depends on what message they decide they want to send. 

By the way, God Man says no increase. Who am I to argue? How to Play When Fed Changes the Game, Not Just the Rules


How to Play When Fed Changes the Game, Not Just the Rules

The “Pause that Refreshes”?

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They already have $800B in the regionals....they have run out of amunition.

So they have to reload.

The Fed industrial complex really doesnt want to see any more regionals go "FDIC".

Its also very bad politics.

So its back to the FHLB as the primary bail out mechanism.

This is what I call soft nationalisation.

The implicit deposit guarantee makes a comeback.

They have to plug the regional bank solvency gap.

They are going to use a combination of:

1/ FHLB advances.

2/ Large bank deposits.

3/ Recapitalisations (Prefs and Warrens).

4/ Fed Printing (as a last resort).

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As I have said before in a high debt high inflation "Frame" treasuries are trashuries.

In such a frame at least junk bonds will compensate you for the inflation through the interest rate, and the underlying assets will appreiciate in value and make the junk bonds safer from a collateral point of view.

But with trasheries you get the worst of both worlds no collateral and lower rates that don't compensate for inflation.

Think Argentina.

However Argentina hard defaulted because its debts were in foriegn currencies.

US govt debt is in US dollars so they go the inflationary default route....every time.


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US officials study ways to expand FDIC coverage to all deposits -Bloomberg News



MaybI remind you that e.g. In Cyprus and several other European countries like Greece during the crisis they cut uninsured deposit.

Will they kill capitalism in US? Thats gona be another example that rules and capitalism are for suckers.

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It would be insane if they would guarantee for ALL deposits.

But so were negative interest rates. If you would have asked me, say in 2005, if there will be negative interest rates in the Eurozone I would have said: "What? What are you talking about? That would mean the end of capitalism, the end of proper risk calculation, and so forth. Never ever will they do that!"

10 years later we had negative interest rates. For years!

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