The bears’ line in the sand held last week but the war isn’t over yet. Here are the parameters of the battle and what to expect when they break.
Treasury auction demand has risen along with supply recently but bond prices keep falling and yields keep rising. Why? Because buyers must liquidate bonds in the secondary market to raise the cash to buy new issues. That’s just one sign of the tightening liquidity noose that is strangling the markets. There are more. Here’s what they are, and why you…
Tax collections surged in April on a massive gain in individual non-withheld income taxes. On the other hand, social security taxes, which weren’t impacted by tax law changes, showed no gain on an inflation adjusted basis. Here’s what that means for your investments.
Here are the latest targets for the current moves in gold and the mining stock index.
The market met the best hopes of bulls and worst expectation of bears last week as it broke out above 2673 and hit my potential target of 2725. It’s in a meltup channel but faces multiple resistance lines. Here’s where they are and what to look for.
The macro liquidity picture shows you why this rally should be sold.
Key cycles have entered down phases. Here’s where they’re headed.
The market is again at a crossroads. A strong start to this week could trigger buy signals on the 10-12 month cycle. But bears could stay in control if certain things happen. This report covers the triggers for both scenarios.
Withholding tax collections continued their decline in the month ended April 30, reflecting the impact of the new tax law. As a result, we should continue to expect increases in Treasury supply to pound the market every month. Here’s how this works and what it means for the market.
But it hasn’t done much. Things are about to get worse–a lot worse.
Gold looks set for an extended consolidation. Here’s what to look for to signal the next big move.
The SPX has reached a moment of truth. It is trading just below the confluence of several short term and intermediate trendlines. Here’s where the signs point.
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Net margin debt is a measure of leverage investors carry in their markets exposures, or, put differently, the level of debt accumulated on margin accounts. Back at the end of March 2018, the level of margin debt in the U.S. stock markets stood at just …
Bitcoin is just one of the cryptocurrencies, albeit the dominant one by market capitalisation and mining assets deployment. The cryptocurrency is best known for volatility of its exchange rate to key fiat currencies and other commodities, but the more …
I got an interesting comment the other day on one of my columns on Money Morning, and it really points up a recurring misunderstanding that I see about the economy and the markets. So with apologies to Jon, I’m going to use him as a quick object lesson this weekend. (Thanks for commenting, by the way!)
Jon: The author, in my opinion, is off base. Consider that interest rates were manipulated by the Federal Reserve and their counterparts around the world, for what reason? The answer was to stimulate the world economies because at that time we had excess manufacturing capacity worldwide.
To a lesser extent we still have excess capacity but less so than 10 years ago. The Fed has not lost control but it will be tricky to balance the inflationary forces against lessened overcapacity to normalize rates and shrink its balance sheet.
The European Central Bank has to deal with the details of the financial markets in such a way that it has become a daytrader and organizes a planned economy. That said Econopolis economist Geert Noels yesterday. The banks are still ‘too big to fail’, but much worse is that the central banks are ‘too big […]
Where to begin? Contagion…
What happened to the Euro area current accounts since the introduction of the Euro?Periodically, I update my charts on the Euro effects on the external balances of the EA-12, the original economies of the Euro area. Here are the updates:Considering fir…
T bill issuance continued its upward climb in April despite the Treasury doing a massive mid-month paydown using all that cash it got from mid-April tax receipts.
Dealer takedown of the bills at auction was flat, as the Fed increased its cash withdrawals from the banking system under its bloodletting, aka “normalization” program.
Cash is the dealers’ lifeblood. Sure, they can leverage up, but cash is the basis for that. Under QE, there was always more cash. Under the Fed bloodletting, dealers will have less and less cash to play with.
Meanwhile demand for T-bills from investment funds continued to soar. Since the funds weren’t heavy in cash, this demand must come from them liquidating other investments. Therefore, the declining availability of cash, and the associated rise in interest rates will continue to suck the lifeblood from stocks and bonds as more funds opt to hold T-bills in lieu of bonds and equities.
The Fed has published a schedule of increased draining operations through October of 2018. Then it will maintain a crushing pace of withdrawals until it achieves a “normalized” tight reserve position on its balance sheet. That should take until mid-2020.
Over the next 2 years, dealers will be starved of cash and other buyers won’t be able to pick up the slack because they too will have less cash on balance. Bill rates will continue to rise, as they have been, and stocks should come under increasing pressure. The Fed will be forced to rubber stamp rising money rates by announcing increases in the Fake Funds target rate. That’s a shell game. The real action will be in the secondary market ratees of various maturities of T-bills, where the rise has been relentless, and should continue to be.
Today, I want you to look closely at this chart and notice who isn’t buying!
The post Here’s Who Isn’t Buying T-Bills (And Why That Should Scare You) appeared first on Lee Adler’s Sure Money.
The price of Bitcoin fell to its lowest level in one month after a brutal sell-off rattled cryptocurrency investors across the entire market.
The price of Bitcoin continued to slump after the conclusion of the Consensus 2018 conference – the fourth an…
I believe if you were to ask most people their definition of the worst economic case, they would respond with some description of a crash. An exceedingly large contraction that spares practically no one, destroying much in its path. Like what followed 1929, that would seem to qualify. It’s why we spend so much time…
Even by the deeply flawed and misleading Consumer Price Index (CPI), inflation is at the U.S. Federal Reserve’s target. By other measures that more accurately portray inflation, it is well above target.