DrStool Posted August 25, 2023 Report Share Posted August 25, 2023 Over at Intraday Chart Central, the ES 24 hour S&P futures are trying to form a 5 day cycle low. If they get to 4400 by this afternoon, that would tend to confirm. Otherwise, we're still looking at a 5 day cycle projection of 4445 or fight. Meanwhile, the 10 year Treasury yield remains within an uptrend, within an uptrend, within an uptrend. Meanwhile, Bloomberg is floating a trial balloon about the Fed ending QT because the T-bill issuance is "draining reserves." That's just total bullshit. The bill issuance pulls cash out of the banking system for a week, and then the Treasury spends the money, paying beneficiaries, employees, and contractors. The money gets deposited right back in bank accounts and instantly shows up on the Fed's balance sheet in the banks' accounts at the Fed. Which bank deposits at the Fed the econocognoscenti all erroneously refer to as reserves. The reserve requirement is zero. Therefore, these accounts are not "reserves." They're just money, just the same as when they are in the Treasury's account at the Fed, or overnight RRPs RRPs at the Fed, in money market funds or in bank accounts. It's all money. It only differs as to the line item at the Fed. It's like spaghetti on a plate. Only difference is that some of it gets pushed around on the plate, some goes in your mouth, and some comes out in the end. The mainstream media is ignorant on purpose. It gets paid to be ignorant. Same for econ academia. The word academia sounds like a disease. Appropriately. They are all handmaidens to the Wall Street Mob. Pimps. But they're useful pimps. Once the trial balloons are floated, you know that it's coming. Usually the lead time is about 6 months from the first balloon. The end of QT is coming. Here’s Why Gold Needs 2020 Vision LEE ADLER 3 - GOLD TRADER AUGUST 25, 2023 Short term cycles have bottomed and there are hints of a bottom in the xxxx month cycle. A daily close above xxxx would tend to confirm that. The 13-week cycle would resync with the bigger cycle if that happens. But it’s too early to tell if that would lead to the 6-month cycle getting in gear also. A xxxxxxxxx xxxxxxx xxxxxxxxxx 2020 would give xxxxxxxxx xxxxxx xxxxx on that. Non-subscribers click here for access. I have added two buys to the miners’ swing picks. Non-subscribers click here for access. Subscribers, click here to download the report. Alternate download link in case of error message. Try Lee Adler’s Gold Trader risk free for 90 days! For moron the markets, see: Here’s Why Gold Needs 2020 Vision August 25, 2023 Here’s Why This Is a No Clickbait Market for Primary Dealers August 24, 2023 Weak Week but List Stays Net Positive August 22, 2023 Weaker Than It Should Be Means Worse To Come August 20, 2023 Gold and Miners Set Up Ugly August 17, 2023 One Banking Indicator Is Flashing Bright Red for Stocks August 16, 2023 I Liked the Buys Better Than the Sells August 14, 2023 More Supply is Just a Lie But Withholding Weakens August 4, 2023 If you are a new visitor to the Stool, please register and join in! To post your observations and charts, 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 folder. Link to comment Share on other sites More sharing options...
fxfox Posted August 25, 2023 Report Share Posted August 25, 2023 13 minutes ago, DrStool said: The mainstream media is ignorant on purpose. It gets paid to be ignorant. Same for econ academia. The word academia sounds like a disease. Appropriately. They are all handmaidens to the Wall Street Mob. Pimps. But they're useful pimps. Once the trial balloons are floated, you know that it's coming. Usually the lead time is about 6 months from the first balloon. The end of QT is coming. Looks like the usual March low. March 2003, March 2009, March 2020, March 2024... Gonna be interesting what happens till then... Link to comment Share on other sites More sharing options...
SiP Posted August 25, 2023 Report Share Posted August 25, 2023 Best macro guys i follow (like capital economics) still forecast bonds to fall. 10-year Treasury yield of 3.25% and 3.00% by end-2023 and end-2024. They are sayin that bond yields peaked Link to comment Share on other sites More sharing options...
fxfox Posted August 25, 2023 Report Share Posted August 25, 2023 10 minutes ago, SiP said: Best macro guys i follow (like capital economics) still forecast bonds to fall. 10-year Treasury yield of 3.25% and 3.00% by end-2023 and end-2024. They are sayin that bond yields peaked What did the same guys say 1 year ago? Link to comment Share on other sites More sharing options...
specie Posted August 25, 2023 Report Share Posted August 25, 2023 There are a lot of people that should know better that don't realize the reserve requirement is ZERO. Link to comment Share on other sites More sharing options...
potatohead Posted August 25, 2023 Report Share Posted August 25, 2023 thoughts on the idea that they diminish QT but raise the reserve requirement to attempt to control any inflationary effects? Link to comment Share on other sites More sharing options...
DrStool Posted August 25, 2023 Author Report Share Posted August 25, 2023 13 minutes ago, fxfox said: What did the same guys say 1 year ago? More Wall Street wiseguys have been more wrong about bonds for longer than any other investment in history. They get paid many millions to be wrong. Their job is to find suckers for the dealers to sell to. With Treasury inventory constantly piling up, they constantly have to sell, sell, sell. This is a secular bear market. Treasuries will continue to trend lower in price and yields will continue to rise until the supply-demand equation changes. And the only foreseeable thing that would change that is if the Fed starts buying again. I called the top in the bond market (bottom in yields) in September 2020. I have been resolutely bearish on the long term ever since. I don't know anyone who has been as right about it as I have. Some of the most famous bond guys and economists have been the most wrong about it. Like I said, they get paid to be wrong. 1 Link to comment Share on other sites More sharing options...
potatohead Posted August 25, 2023 Report Share Posted August 25, 2023 4 minutes ago, DrStool said: More Wall Street wiseguys have been more wrong about bonds for longer than any other investment in history. They get paid many millions to be wrong. Their job is to find suckers for the dealers to sell to. With Treasury inventory constantly piling up, they constantly have to sell, sell, sell. This is a secular bear market. Treasuries will continue to trend lower in price and yields will continue to rise until the supply-demand equation changes. And the only foreseeable thing that would change that is if the Fed starts buying again. I called the top in the bond market (bottom in yields) in September 2020. I have been resolutely bearish on the long term ever since. I don't know anyone who has been as right about it as I have. Some of the most famous bond guys and economists have been the most wrong about it. Like I said, they get paid to be wrong. Spot on, Lee... you nailed it. 1 Link to comment Share on other sites More sharing options...
DrStool Posted August 25, 2023 Author Report Share Posted August 25, 2023 Just now, potatohead said: thoughts on the idea that they diminish QT but raise the reserve requirement to attempt to control any inflationary effects? I wouldn't want to speculate on something like that. I still think that money moves markets. Anticipation doesn't. At least not for long. I think that reinstituting a reserve requirement would be so cataclysmic that it would never even be discussed. They would have to limit sweep accounts, and institute a reserve requirement on savings accounts. Furthermore, it would be a one shot deal. Once it's instituted, that's it. Unless they keep raising it. The Fed doesn't like draconian measures. It likes gradualism. Another thought is that QT is an ongoing process of constant pressure. So they can reduce that, but what would happen with zero QT and zero QE? It would be totally up to market participants. Just like now. Only a return to QE would retilt the playing field to bullish. 1 Link to comment Share on other sites More sharing options...
potatohead Posted August 25, 2023 Report Share Posted August 25, 2023 I was thinking of the reserve requirement increase as a monetary control over regular bank loan and leverage creation. Allow borrowing from T-bills (repo) to continue and not allow banks to compete with Treasury yields. Attempt to internally fund the US Government's enormous supply with more retail/institutional bank customers. Would end up gutting bank's profit margins. These banks stocks look sick. 1 Link to comment Share on other sites More sharing options...
specie Posted August 25, 2023 Report Share Posted August 25, 2023 9 minutes ago, potatohead said: I was thinking of the reserve requirement increase as a monetary control over regular bank loan and leverage creation. Allow borrowing from T-bills (repo) to continue and not allow banks to compete with Treasury yields. Attempt to internally fund the US Government's enormous supply with more retail/institutional bank customers. Would end up gutting bank's profit margins. These banks stocks look sick. astute observation 1 Link to comment Share on other sites More sharing options...
DrStool Posted August 25, 2023 Author Report Share Posted August 25, 2023 41 minutes ago, potatohead said: I was thinking of the reserve requirement increase as a monetary control over regular bank loan and leverage creation. Allow borrowing from T-bills (repo) to continue and not allow banks to compete with Treasury yields. Attempt to internally fund the US Government's enormous supply with more retail/institutional bank customers. Would end up gutting bank's profit margins. These banks stocks look sick. If they marked their bond portfolios to market, we would all see why they look sick. Because not only are they sick. They're dead. How long can this be papered over? How long will the con succeed? Here’s Why This Is a No Clickbait Market for Primary Dealers Link to comment Share on other sites More sharing options...
fxfox Posted August 25, 2023 Report Share Posted August 25, 2023 Awesome Fred today. Thank you all. Link to comment Share on other sites More sharing options...
fxfox Posted August 25, 2023 Report Share Posted August 25, 2023 1 hour ago, DrStool said: I wouldn't want to speculate on something like that. I still think that money moves markets. Anticipation doesn't. At least not for long. I think that reinstituting a reserve requirement would be so cataclysmic that it would never even be discussed. They would have to limit sweep accounts, and institute a reserve requirement on savings accounts. Furthermore, it would be a one shot deal. Once it's instituted, that's it. Unless they keep raising it. The Fed doesn't like draconian measures. It likes gradualism. Another thought is that QT is an ongoing process of constant pressure. So they can reduce that, but what would happen with zero QT and zero QE? It would be totally up to market participants. Just like now. Only a return to QE would retilt the playing field to bullish. „Retail“ better hopes there will be not a zero QT/zero QE market. The pro dealers would massacre and cruzify them. It would be like skeet shooting: Link to comment Share on other sites More sharing options...
potatohead Posted August 25, 2023 Report Share Posted August 25, 2023 $85 billion coming out of RRP yesterday. Will that be enough to get the speculative juices flowing? Link to comment Share on other sites More sharing options...
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