Bullish Macro Liquidity Ends August 20th

Macro liqudity been bullish since early July. That was no secret. We were fully informed and prepared. And it’s no secret that this balance is about to flip to bearish. Really bearish. Can our beloved Fed get ahead of that curve?

The US Treasury issued its quarterly refunding report this week. So we now know what to expect from the US Treasury. We already knew what the Fed’s plans were. It made its policy pronouncement last week. More of the same. Snooze.

But that expectation is only good for the balance of this quarter, that is, through September. The government’s forecast for debt issuance beyond that, for the last calendar quarter, and maybe even for the next 7 weeks, should be taken with 5 pounds of salt.

The Treasury Borrowing Advisory Committee (TBAC) does ok for the current quarter when it issues its estimate halfway through the quarter. It helps to know what has already happened for the first half of the quarter. But their look-ahead forecasts to the following quarters are usually revised significantly, and sometimes completely reversed.

So we’ll focus on what we can reasonably expect from now through September. Even though we don’t know how much the government will spend on economic relief.

Here’s the key takeaway.

Open the report to find out what it is, why it is, and what to expect.

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Lee Adler

I’ve been publishing The Wall Street Examiner and its predecessor since October 2000. I also publish LiquidityTrader.com, and was lead analyst for Sure Money Investor, of blessed memory. I developed David Stockman's Contra Corner for Mr. Stockman. I’ve had a wide variety of finance related jobs since 1972, including a stint on Wall Street in both sales, analytical, and trading capacities. Prior to starting the Wall Street Examiner I was a commercial real estate appraiser in Florida for 15 years. I was considered an expert in the analysis of failed properties that ended up in the hands of bank REO divisions, the FDIC, and the RTC. Remember those guys? I also worked in the residential mortgage and real estate businesses in parts of the 1970s and 80s. I have been charting stocks and markets and doing analytical work since I was a teenager. I'm not some Ivory Tower academic, Wall Street guy. My perspective comes from having my boots on the ground and in the trenches, as a real estate broker, mortgage broker, trader, account rep, and analyst. I've watched most of the games these Wall Street wiseguys play from right up close. I know the drill from my 55 years of paying attention. And I'm happy to share that experience with you, right here. 

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