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

The Fed’s Deadly Error: Penalties For Labor And Thrift; Windfalls For Speculation In Land And Financial Assets

Composite Liquidity Indicator - Click to enlarge

There’s no law that says the stock market can’t have a major correction when central banks are pumping money into the system via the Primary Dealers. But in the 12 years since the Fed began publishing detailed data on its operations, and since I began observing those operations closely, the correlations between central bank liquidity…

Surging Liquidity Keeps Playing Field Tilted

Composite Liquidity - Click to enlarge

The composite liquidity indicator surged to another new high last week. That was not enough to stop a sharp selloff in stocks. But when the Fed’s monthly MBS purchase settlements began on April 10, that stopped the bleeding. While there have been a number of ominous technical signals in the charts of stock prices and cycle indicators, strictly on the basis of the liquidity trend, I am forced to conclude that this was just another instance of the dealers shaking out some inventory before marking them up and distributing them again.

Time For Market To Put Up, or Me To Shut Up

I’ve been talking about the huge paydowns of outstanding Treasury debt coming in April that should boost both stocks and bonds. I also pointed out that extremely strong withholding tax collections meant that supply could be even lower and paydowns even larger than the TBAC forecast. That has already begun to play out. Now it’s…

Look Out! Massive Treasury Paydowns Are Almost Here

Withholding tax collections continue to be very strong suggesting lighter than expected Treasury supply and huge paydowns of outstanding Treasury debt in April that should boost both stocks and bonds. But beware, Primary Dealers are in distribution mode… Table of Contents Treasury Auctions Week Just Completed Week Ahead Treasury Auction Takedowns By Investor Class Primary…