potatohead Posted June 13, 2023 Report Share Posted June 13, 2023 42 minutes ago, DrStool said: It does not take much to keep the S&P inflated. They only need to move seven stocks. Maybe that is not manipulation but it sure fits into the category of managing the expectations, wealth effect, and the tape. In today's world of indexing and passive flows, that is all that is needed to maintain perception of utopia. I have to say, Lee, your work is so undervalued. The crap I read that has 100's thousands of followers is recycled work of others or recycled garbage. Link to comment Share on other sites More sharing options...
DrStool Posted June 13, 2023 Author Report Share Posted June 13, 2023 RRPs now down $200 billion since May 22. They are funding the T-bill issuance= $151 B, with 49 B left over for "other". Link to comment Share on other sites More sharing options...
DrStool Posted June 13, 2023 Author Report Share Posted June 13, 2023 1 minute ago, potatohead said: Maybe that is not manipulation but it sure fits into the category of managing the expectations, wealth effect, and the tape. In today's world of indexing and passive flows, that is all that is needed to maintain perception of utopia. I have to say, Lee, your work is so undervalued. The crap I read that has 100's thousands of followers is recycled work of others or recycled garbage. There's a lot of misinformation out there. People like esoterica, particularly when it's false but confirms their biases. When you give them Accounting 101, the vast majority are not interested. They refuse to believe that debits and credits must balance. They don't understand that on the Fed's balance sheet, with capital a constant, Assets=Liabilities. Nothing the Treasury or the banks will do will change that. They keep talking about reserve drains as if that's causal. So the Treasury will pull $600 billion out of bank accounts and put it to sleep in its cash account. It held $600 billion for a couple years and nobody complained. What's different now isn't that the Treasury is rebuilding that account. It has drawn it down and rebuilt it before. It's that the Fed is doing QT. In the previous 12 years the Fed added $100 billion a month to the market like clockwork. Now it's pulling out a net of $70B per month. That's the difference. Link to comment Share on other sites More sharing options...
WTF Posted June 13, 2023 Report Share Posted June 13, 2023 The markets better hope for more of a pop tomorrow or this "new bull market" is going to be very short lived... Link to comment Share on other sites More sharing options...
DrStool Posted June 13, 2023 Author Report Share Posted June 13, 2023 It started in October. It should be shorter than typical. Link to comment Share on other sites More sharing options...
TurdButter Posted June 13, 2023 Report Share Posted June 13, 2023 46 minutes ago, DrStool said: RRPs now down $200 billion since May 22. They are funding the T-bill issuance= $151 B, with 49 B left over for "other". Are RRP balances all MMFs? Had that impression. If so, wouldn't the $49B be available just for other MMF investments, not longer term ones? Link to comment Share on other sites More sharing options...
jp6 Posted June 13, 2023 Report Share Posted June 13, 2023 3 hours ago, SiP said: both nasdaq 100 and SP500 crossed 61,8% fibonnaci levels and open the doors to test ATH Do you remember what Dow did last year when everything was heading south??. Took out 61% and more then what happened? Now same game, NDX taking SPX up with it and Dow doing nothing. market will take your money if you believe new high is coming also Crash is coming like 1929. Think like 1966-1982 with market churning which will eat up P/E with Inflation. When did Nixon defaulted during that time? Real trade is there only if one opens one Mind. Why the Hell is Powell offering better yield then even BOE. Years ago BOE use to set Rate higher then US. Simple trade was Buying Gold when Nixon defaulted. $35/Ounce is worth over $1700. What is the next trade??? What is Yields telling you and why is Powell offering more?? Best rates in G7 Another simple trade buy and forget is coming Link to comment Share on other sites More sharing options...
Takachi-1 Posted June 13, 2023 Report Share Posted June 13, 2023 If the banks are now borrowing from the Fed the difference between the ATMarket and ATmaturity values, isn't that a perpetual motion cash machine to borrow and "reinvest the losses" in more government debt. If so, there may never be a day of reckoning except the erosion of the value of the dollar. The public would never see it. This effort to recession proof the economy just kills the ability to jettison poorly run companies of every type. Link to comment Share on other sites More sharing options...
DrStool Posted June 13, 2023 Author Report Share Posted June 13, 2023 32 minutes ago, TurdButter said: Are RRP balances all MMFs? Had that impression. If so, wouldn't the $49B be available just for other MMF investments, not longer term ones? Money market funds are intermediaries. Who holds money market funds? Link to comment Share on other sites More sharing options...
TurdButter Posted June 13, 2023 Report Share Posted June 13, 2023 So, would the most bearish thing the Fed could do be to significantly increase the scale of QT? If they happened to increase monthly QT volume by 50% and did not hike would that be more negative than raising FF target by 50 bp but leaving QT volume unchanged? Interested in hearing from all. Link to comment Share on other sites More sharing options...
Jimbo Posted June 14, 2023 Report Share Posted June 14, 2023 THE BACKGROUND RADIATION OF THE BIG PRINT The Big Bang produced a lot of back ground radiation....it took time to decay. Similarly the Big Print of 20/21 produced a lot of background liquidity. Which is similarly taking a long time to disburse. The RRP is fundamentally concentrated background liquidity. As were the SPACs, Crypto and NFT's. But while the other concentrated liquidity bubbles have popped and are disbursing.... The RRP soldiers on...... Carefully protected and husbanded by the FED Thats because it is its emergency rainy day liquidity fund. Used when needed...for emergencies....like now.... It is needed now to plug the Treasuries liquidity gap. And that's why all the short hopers and gropers are being squeezed.... There high probability sure thing short trade being neither high probability nor a sure thing...... For some strange reason they keep on forgeting that Government's exist to frustrate their desires. Link to comment Share on other sites More sharing options...
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