Crowding Out- The Unreported Crisis- WSE Pro
The Fed kept up the pace of the fastest 3 week expansion of the monetary base in the past 7 years in an effort to help the Primary Dealers absorb $76 billion in new Treasury supply over 3 days. It was not enough to keep stocks from selling off. Click here to download complete report in pdf format (Professional Edition Subscribers). Try the Professional Edition risk free for thirty days. If, within that time you don’t find the information useful, I will give you a full refund. It’s that simple. Click here for more information. Due to the production of an extended Radio Free Wall Street podcast and this extended special Fed Report, the posting of the nightly market update will be delayed. We apologize for the inconvenience.
Rather alarming I’d say. But when was the $76 Billion treasury issue previously announced… i.e. how much notice did the market have that these were going to be auctioned today, tomorrow and Monday? TIA.
Treasury auctions take place on a schedule published at the beginning of the fiscal year. Except for the 4 week bill, the amounts are announced the week before. All of the information is published at Treasury.gov. CMBs are issued as needed, with announcements a day or two before the auctions.
The days referred to the issue dates not the auction dates. Markets can be disrupted on the announcement date, the auction date, and/or the issue date depending on the amount in the announcement and what the Fed does about it. Weak auctions often trigger stock market declines.
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You’re doing great analysis here, Lee. I see several journalists, including the one at my paper, lead with Bernanke rejecting stagflation. Seems to me he would have to concede that we have stagflation now and may get lower prices later in the year. But his comment on bank failures was certainly the news of the day and you astutely link it to need to sell Treasury securities. I always try to keep in mind that Treasury is the Fed’s biggest client, and lest I forget, you reminded me by putting these events together. It wouldn’t surprise to learn that hedge funds and big banks read your site!
Thanks for the kind words, Len.
I have never been more concerned, more worried, about the future than I am right now. I have this awful feeling that the wheels are coming off.
I wonder if this is how my grandfather felt in 1929. He owned 18 multifamily rental properties, plus a building with several shops including his grocery store and the family home upstairs.
By 1934 all that he had left was the family business and home. There are a lot of parallels between today and those times.