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Today’s Treasury Auctions – What’s That Smell

Broadcast straight  from the bowels of the US Treasury

CUSIP: 91282CAA9
Term and Type: 1-Year 10-Month FRN
Series: BE-2022
Reopening: Yes
Spread: 0.055%
High Discount Margin: 0.058%
Price: $99.994389
Allotted at High: 50.98%
Total Tendered: $63,408,207,700
Total Accepted: $22,000,067,700
Auction Date: 09/23/2020
Issue Date: 09/25/2020
Maturity Date: 07/31/2022

This is all new money, but there are $26 billion in T-bill paydowns surrounded that this week that will fund this.

And of course, the Fed keeps adding money to the pot so that Primary Dealers can buy stuff and mark it up. They’ve had a bit of a problem doing that over the past two weeks, haven’t they.

Problems like this beget more problems. The Fed may be forced to step up and do more if this deleveraging nonsense doesn’t stop. I can’t imagine why any dealer, bank, or leveraged speculator would want to strengthen their balance sheet now by liquidating debt, can you?

OK, for those of you who don’t know me, that was sarcasm, folks.

Get the big picture outlook at Liquidity Trader.

Macro Liquidity Rising But Other Issues Intrude

Composite liquidity continues to rise, but at a slower pace than in the second quarter as the Fed has slowed QE. That reduces the cash flowing into Primary Dealer accounts, which in turn contributes to a slowing in secondary liquidity drivers.

“Slowing” is a relative word, however. Historically, the numbers remain gargantuan.

No, something else is holding the market back. Here’s what that something is, and what we’re going to do about it.

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Lee Adler

I’ve been publishing The Wall Street Examiner and its predecessor since October 2000. I also publish, 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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