Liquidity Trader – Macro Liquidity- Fed and Banking

Analysis of the major forces of macro liquidity that drive markets, including the Fed, foreign central banks, and the US and European banking systems. Resulting market strategy recommendations. Click here to subscribe. Now published at Lee Adler’s Liquidity Trader.

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Bulls Are Overeating The Thanksgiving Turkey, But They’ll Be Puking Next Week

The recovery rally in stocks in October was a direct result of Treasury paydowns, which was a temporary effect. That has been reversed as the debt ceiling was raised and the Treasury returned to the market with a vengeance, pounding it with $310 billion in net new supply since the end of October. $100 billion…

Treasury Clawbacks Begin To Show Up In Fed’s Balance Sheet, And The Markets

This week’s Fed H41 data began to reflect the Treasury returning to the market to claw back big chunks of the cash it had injected into dealer and other accounts over the past couple of months. The effects of the clawbacks had already shown up in the Treasury market, and now they’re starting to be…

Fed Balance Sheet Semi Tight as Treasury Pulls Cash From Markets

With Treasury paydowns ending that week, and the Treasury returning to the market to claw back big chunks of the cash it had injected into dealer and other accounts over the past couple of months, next week’s Fed H41 data should start to reflect that. The Treasury account balance should grow, and bank reserve accounts…

Macroliquidity Pulls Back But Still Trending Up

Macroliquidity declined last week, but the trend is still positive, although at a much shallower angle than during the years when the Fed was doing QE. The recovery rally in stocks has been a direct result of Treasury paydowns, which was a temporary effect that will now be reversed as the debt ceiling has been…

The Most Important News Today – Treasury announces 69-Day Bill- The Clawback Begins

This is even more important than the FOMC announcement. Now that the debt limit deal is all but signed, sealed, and delivered, the Treasury will begin to claw back some of the $140 billion in cash it paid to dealers and other investors who held expiring 4 week bills, and maturing 2 year notes that were not rolled over since September 15,

The Fed’s BS (Balance Sheet) Returned To Normal Last Week, Sort of

The Fed’s liabilities settled down last week after a couple of weeks of wild fluctuations which resulted directly from the Fed encouraging banks to dress up their quarter end balance sheets with Fed RRPs. Now that those shenanigans are done until the end of December, a semblance of normalcy has returned to the balance sheet.

Liquidity and the Odd October Rally

The US stock market recently has begun to appear flush with cash again. Dip buyers have returned with a vengeance. The levers and pulleys between the actions of the world’s major central banks may be worn, but it looks like they’re still working. Follow the money. Find the profits!Liquidity is money. Regardless of where in…

Fed Minutes Are A Waste of Time

I will no longer comment on the bulk of the FOMC minutes. They focus on the Fed staff’s and FOMC members’ views of the economy and the markets. Why bother with that? The Fed makes policy on an ad hoc basis based on whatever happened in the markets in the weeks immediately prior to the meeting. Forward guidance is therefore meaningless and so analyzing the propaganda about the Fed’s decision process is a waste of time.