DrStool Posted June 11 Report Share Posted June 11 Yesterday's breakout has been erased. A 5-day cycle of phase has failed early. This morning's pulled back is currently at a critical point. I'm on a train headed for Italy. More later! For moron the markets, see: Swing Trade Screen Picks – Had the Plot, But Not the Right Actors June 10, 2024 The Top Must Wait June 9, 2024 Something Ugly Could This Way Come for Gold June 7, 2024 May Tax Collections Were Super Bullish June 6, 2024 After Growth in the Spring Comes the Harvest June 4, 2024 June Swoon Called Off May 29, 2024 The Fed Doesn’t Matter Any More May 1, 2024 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...
DrStool Posted June 11 Author Report Share Posted June 11 Oops voice text typo in the heading. Can't change it because it will change the link and no one will be able to find the thread. uhhhhh..... Link to comment Share on other sites More sharing options...
DrStool Posted June 11 Author Report Share Posted June 11 Hangin on for dear life here. Link to comment Share on other sites More sharing options...
DrStool Posted June 11 Author Report Share Posted June 11 Here's a thought. Travel and open trading positions do not mix. Link to comment Share on other sites More sharing options...
DrStool Posted June 11 Author Report Share Posted June 11 1st spport 5325. Link to comment Share on other sites More sharing options...
potatohead Posted June 11 Report Share Posted June 11 Lee has documented this countless times. excellent interview on outright money printing/reserve creation, managing markets and expectations Link to comment Share on other sites More sharing options...
DrStool Posted June 11 Author Report Share Posted June 11 "The Fed has to issue debt to buy debt." What an absolute load of crap. The Fed creates "reserves" out of thin air by issuing a credit to the accounts of the dealers from which it purchased the debt. It paid an interest subsidy to the banks and MMFs as a policy matter. It did not have to do that. In fact, it set the level of those payments at zero for years, and then arbitrarily started subsidizing the banks when it raised the Fed Funds Rate, the IOER, and the RRP rate. Purely arbitrary monetary policy actions. WHen the Fed created that excess money in the system, it had to go somewhere. It went into stocks and bonds, creating the greatest bubbles in history. The deposits it created in the dealer accounts instantly became money. The Fed can arbitrarily decide to sell its assets and thereby remove those deposits from the banking system, which the banks don't hold any reserves on. It's simply excess cash that they have on deposit at the Fed. They can trade with each other, but the money can only leave the system if and when the Fed decides to remove it by redeeming or selling the assets it holds. So as the Fed lets the Treasury debt roll off the balance sheet the deposits that it created also disappear. On the other hand, Treasuries can be repoed. So when the dealers, hedge funds and others buy government debt with repo paper, the money supply also expands. But so does the leverage and the danger. The difference between Fed created money and repo created money is the leverage. It will blow up if they allow prices of stocks and bonds to fall. Under QE, they couldn't fall because the Fed was a constant buyer. These crumbbums are a bunch of self congratulatory bunko artists. 1 Link to comment Share on other sites More sharing options...
potatohead Posted June 11 Report Share Posted June 11 I also learned the real reason we can not afford a recession.....The Feds balance sheet would balloon. Link to comment Share on other sites More sharing options...
Takachi-1 Posted June 11 Report Share Posted June 11 "These crumbbums are a bunch of self congratulatory bunko artists" Amen brother! Link to comment Share on other sites More sharing options...
DrStool Posted June 11 Author Report Share Posted June 11 1 hour ago, potatohead said: I also learned the real reason we can not afford a recession.....The Feds balance sheet would balloon. Not gonna be a recession with 1.5 trillion in deficit spending every year. That's crackup boom material. It's like giving crack to a speed junkie. Link to comment Share on other sites More sharing options...
DrStool Posted June 11 Author Report Share Posted June 11 As long as the players are willing to repo the paper and use margin, this BS can continue. That's a realization I came to more than a year ago. Originally I thought QT would crush everything, but Treasury borrowing is exactly the same as money printing because the financial community sees that paper as money. They can't spend it directly but they can use it as collateral up to I think 97 cents on the doolah. On that, I'll say, Ciao ciao from Sanremo, Italy. Link to comment Share on other sites More sharing options...
DrStool Posted June 11 Author Report Share Posted June 11 I couldn't listen to the whole video because I have a bad wifi connection at the apartment where I'm staying in Sanremo. Beautiful old town. I just heard that one section and of course, it was disheartening to hear him say that the Fed borrows money and there's no change in the amount of debt. Like, huh? Link to comment Share on other sites More sharing options...
Recommended Posts