Money and The Fed

Reports on the Fed and Treasury, primary dealers, foreign central banks, money market and mutual fund flows, and other factors that affect market liquidity

Peak Financial Engineering

Real time tax collection data shows that business boomed in the second quarter. Record corporate and individual tax collections are similar to where they were just as the housing bubble was about to collapse. Have we reached the peak of the QE/ZIRP driven financial engineering bubble? Meanwhile, the first real test of Tapered QE is…

Current QE Level Still Sufficient For Bubble To Continue But Change Is Coming This Fall

The next leg of “The Taper” which the FOMC announced this week will cut purchases from the Primary Dealers, including MBS replacements, to around $50 billion per month, which is still sufficient to cover almost all expected net new Treasury supply until the next Fed meeting. But then things will begin to change. Here’s what…

Everybody’s Buying

Doesn’t anybody here want to sell? Dealers, banks, and foreign central banks increased their bond buying in the last weeks of May, as the public continued buying. Institutions drew down reverse repos that they had used to park cash at the Fed to pay for a huge slug of Treasury supply over the past week. The…