UPDATE- A few minor corrections. Federal revenues soared in January. Spending soared more. A lot more. Despite all that stimulus, the tax data suggests that…
The pause in the growth of the Fed’s balance sheet over the past 6 weeks isn’t what the pundits are telling you. Some are saying…
Withholding tax collections are soaring. But despite that and the massive stimulus of skyrocketing government outlays and ever widening deficits, the ‘conomy is only so-so. Here’s why, what it means for liquidity and the markets. And of course, what you should do about it.
With the light supply and the Fed money putting the wind at their backs, Primary Dealers got a gift on top of that. Coronavirus. The panic that induced has driven money out of stocks and into bonds. Just what they needed.
Dealers cut back their fixed income inventories ever so slightly over the past month. They also increased their hedges, but again, slightly. They are still near historical record net long positions, and still carry historic levels of leverage.
With a bulge in Treasury supply on the way, is this where the bond market might trigger them throwing up their hands and saying WTF, despite the Fed?
Supply and demand conditions for stocks and bonds have been as good as it gets over the past month. We can thank the Fed and the Treasury. Here’s what could keep the game going, and what could send the players home, broke.
It ain’t rocket science. The Fed drives liquidity and stock prices are the first order effect because that’s how monetary policy transmission is designed.
Federal revenues softened in December. That could be just a blip, or it could be the first signs of a looming recession. It’s bullish if…
The Fed has monetized 99% of the Federal Debt since it started Not QE. That’s been bullish. Here’s what to look for and how to…
There are growing signs in the banking system that the Fed will lose control, and this won’t end well.
