A couple of minor technical problems called “business” and “life” have now intruded on my increasingly bogged down publication schedule that, in the interest...
Read More »
Papering Over Disaster, Temporarily – Professional Edition
We now have an inkling of how the Treasury will handle the paydown of $185 billion in Treasury CMBs. It will turn what would have been a horrendously bearish period into something less so, but the respite will be temporary. At the very least, it should give the smart money the opportunity to tiptoe out the back door before the crowd stampedes later in the fourth quarter. 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.
3 Responses to Papering Over Disaster, Temporarily – Professional Edition
Radio Free Wall Street
Most Recent Economic Charts
Wall Street Examiner Exclusives
-
Rumors and Denials of Rumors
-
Winter Covers Shorts; Maladjusted US Economy Seems Good Because of European Capital Influx- Free Podcast
-
Three Critical Industries Now in Serious Capital Destruction Mode
-
The Deeper Meaning of the Facebook Flop
-
Weakening Federal Withholding Tax Collections Do Note Bode Well For Employment
Wall Street Examiner Contributors
Lee Adler
Newswires
Aaron Krowne
AG's Nightmare
Belisarius
Bruce Krasting
Charles Hugh Smith
Consumer Metrics Institute, Inc.
David Zeiler
Diane Alter
Dr. Kent Moors
Dude
Economic Perspectives from Kansas City
Frederick J. Sheehan
Frederick Sheehan
Jaime Levine
Keith Fitz-Gerald
Mark McHugh
Martin Hutchinson
NY Fed | Permanent Open Market Operations
Pretzel Logic
Russ Winter
Shah Gilani
Steve Northwood
The Implode-o-Meter Blog
Treasury Auction Results
Treasury Offering Announcements
William Patalon III
RSS Feed
Copyright © 2012 The Wall Street Examiner. All Rights Reserved.
Magazine Premium created by Themes by bavotasan.com.
Magazine Premium created by Themes by bavotasan.com.
Lee,
Given that the increase in Institutional MMF assets since September 2007 is almost precisely equal to the contraction in CP outstanding, is it safe to say that the ‘cash on the sidelines’ argument the bulls are using to support their calls for higher stock prices is an illusion? My understanding is that CP was/is largely used as a cash management tool for corporate Treasury departments with excess working capital. Cash that would otherwise have been put to work in CP is not cash that is ready to be invested in stocks. Would it have been fair to say in 2007 that $2 trillion in CP was a reason to be bullish of stocks?
Is CP outstanding included in MZM?
I guess I am wondering to what degree the assets in IMM funds is ‘high powered’ money that is likely to be put to work in stocks and corporate bonds, or whether this is likely to find a new home in bank deposits or Treasuries given the evaporation of the CP market. Thanks Lee!
I’ve never understood the cash on the sidelines argument at all. I think it is the refuge of dumb asses.
Generally speaking I would think that MMF assets are largely held for purposes other than stock speculation, although obviously a percentage of it is held for that purpose. Russ Winter did some good work on that in Actionable which he discussed in our last podcast. He compares total MMF assets to total stock market cap. He felt it was too high last March, indicating a bottom, and he feels it is too low now, indicating a bubble and an approaching top.
The collapse of MMF assets along with collapsing CP would normally correlate with falling stock prices. We’re in LaLa land at the moment. Dangerous. What happens when the music stops? I think we know the answer, and we have an inkling of when, as I discussed in the report.
Thanks for your comments!