Liquidity Trader

Here’s The Evidence That The US Treasury is Bailing Out Stricken Primary Dealers

The bear market in Treasuries that started in August devolved into an outright crash last week. Meanwhile, evidence shows that cash in Primary Dealer accounts has exploded to the highest level in history, with the biggest weekly increase in history. There’s also circumstantial evidence that that cash came directly from US Treasury, away from the publicly visible means that we already saw last week.

Technical Trader

Gold Mining Stocks Trader

Lee's Free Thinking

The Exact Situation I Had Forecast Is Here, and It’s Grave 2/26/21

Primary Dealers were holding record levels of inventory with record levels of leverage since late Q3 2019. It was all hunky dory as long as bond prices were rising, or at least stable. The mirror of that is yields falling, or stable.

Ever since then I regularly warned about this in my Liquidity Trader reports. I said that it’s a two way street, and that when the inevitable decline in Treasury prices started, it would devolve into big margin calls to the dealers.

Yet Another Comeback 2/24/21

S&P futures are mounting another comeback attempt this morning in Europe, aided by $55 billion in quasi QE from the US Treasury yesterday, with another $41 billion coming tomorrow and $25 billion next Wednesday. Just one problem –of many– the money ain’t going where the Treasury wants it to.

And that is a catastrophic problem for our financial stability.

News and Opinion

Precious Pyrotechnics

The world of precious metals continues to be quite grim. Indeed, gold and its brethren have suffered tick-for-tick with the bond market. The chart is crystal-clear: a right triangle pattern that has been quite plainly broken, and is at risk of much…