Macroliquidity Monthly

Analysis of the major forces of macro liquidity that drive markets for monthly subscribers. Click here to subscribe. Subscribers, click the post headline to access reports.

Disaster In The European Banking System Exposed

Banks Fleeing Banks in Europe - Click to enlarge

ECB data on bank deposits for the Eurozone shows total bank deposits down sharply in July, breaking the uptrend in force since the low in 2014. That’s shocking considering that the ECB just boosted its money printing QE programs. Deposits should be rising steadily in concert with the amount of QE, not falling. But cash extinguishment and capital flight are increasing faster than the ECB can print.

Portents of a Big Problem In Worldwide Market Liquidity

The stock and bond rallies went flat in August as heavy Treasury supply created friction for increasing liquidity. There was also evidence that liquidity growth in Europe has stalled. In spite of massive ECB money printing, European bank deposits fell in July. That indicates not just capital flight, but cash extinguishment via loan repayments and…

Fed and Banking System Indicators Suggest Nothing Changed, But Europe Sucked

This post was miscategorized when first published on September 6. I am currently working on the update for September, which will be posted this weekend. There’s no imminent change in the air according to Fed and US banking system indicators, but deposits in Europe fell as the US sucks up capital and cash from the…

Central Bank Rigging and NIRP Drive US Financial Asset Price Inflation

Negative interest rate policy (NIRP) elsewhere in the world continues to drive liquidity growth and asset price inflation in US. We saw this trend coming when NIRP was first introduced. Now the question is whether the resulting US asset price inflation was an intended or unintended consequence of foreign central bank policy. Would it even…

Loans, Deposits, and Liquidity Still Growing Rapidly In US Banks as Europe Craters

The Fed’s balance sheet remains flat but US banking indicators continue to show rapid systemic growth in loans and deposits, and hence, liquidity, as NIRP and waning confidence drive cash out of Europe. This report is part of the Macroliquidity Pro service. An update on macro liquidity indicators will follow later this week.

Capital Flees Europe to US Markets and Banks

Virtually nothing has changed since the last update, other than an uptick in current US GDP for the second quarter. When economic data releases begin to reflect this next month, the market reaction should be negative as traders conclude, correctly, that the Fed will tighten. Markets top out when the news is good, because that is, in fact, when the Fed turns the screws.