Fumes and False Premises

The gang in Washington and on Liberty Street is either very good or very lucky. The Treasury managed to dump $71 billion in new paper on the market this week, including $62 billion in intermediate and long term paper, without crushing either the Treasury market or stocks. It was truly a bravura performance. But when I look beneath the surface action at the data underpinning it, I have to conclude that the markets were running on fumes and false hopes. The Fed’s balance sheet data, the FCB data, the Primary Dealer data, the commercial paper and money market data, and the money supply data show nothing but contraction, in many cases sharp contraction. Only Treasury debt is expanding, just as the only expanding component of GDP is Federal spending. 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.

Tags: Balance Sheet Data, Bravura Performance, Contraction, False Hopes, False Premises, Federal Spending, Gdp, Liberty Street, Money Market Data, Money Supply Data, Paper Money, Professional Edition, Risk, Running On Fumes, Stocks, Subscribers, Surface Action, Term Paper, Thirty Days, Treasury Market

This entry was posted on July 31, 2009 at 3:51 pm and is filed under Money and The Fed, Professional Edition. You can follow any responses to this entry through the RSS 2.0 feed.