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.
Liquidity Trader – Macro Liquidity- Fed and Banking
Analysis of the major forces of macro liquidity that drive markets, including the Fed, foreign central banks, and the US and European banking systems. Resulting market strategy recommendations. Click here to subscribe. Now published at Lee Adler’s Liquidity Trader.
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Lee's Free Thinking, Liquidity Trader - Macro Liquidity- Fed and Banking
Trying to Prevent Total Collapse, US Treasury Spews Cash Into the Market
by Lee Adler • • 0 Comments
And I’ve spewed a whole lot of words over the past 3 weeks. Scary words. Words including warnings that one of the titans of the trading and brokerage industries has now echoed. Words about QE, the Primary Dealers, and the twin issues of current and expected Treasury supply, and the Treasury’s huge pile of cash,…
Lee's Free Thinking, Liquidity Trader - Macro Liquidity- Fed and Banking
Proof of How QE Works – Fed to Primary Dealers, to Markets, To Money
by Lee Adler • • 0 Comments
There’s so much confusion out there about how money gets from the Fed into the stock and bond markets. I see the comments in my Twitter feed. People are clueless. Like how M1 is causal. Or how the Fed pumps money into the banking system and that doubles back somehow to speculative bubbles.
Liquidity Trader - Macro Liquidity- Fed and Banking
Primary Dealers are Dead – Part 2 – Springtime Coming for Hibernating Bears
by Lee Adler • • 0 Comments
The Primary Dealers always hedge their fixed income portfolio positions in the futures markets. Looking only at their bond portfolio positions may not give us an accurate picture of how screwed they are, or are not.
Liquidity Trader - Macro Liquidity- Fed and Banking
Primary Dealers are Already Dead
by Lee Adler • • 0 Comments
Back in 2008-2009, I chronicled how the Primary Dealers caused the stock market crash. They were the most important and least recognized cause of what the media has labeled the Great Financial Crisis.
The dealers were overleveraged and positioned wrong then. They are overleveraged and positioned wrong today.
Liquidity Trader - Macro Liquidity- Fed and Banking, Must Read
Bloomberg US Treasury (BUST) Channel Sends Bullish Signal
by Lee Adler • • 0 Comments
In the mid month QE update, I concluded the intro summary with this warning:
1/16/21 At this point, it seems like we are on the edge of the precipice. The risks are enormous. At the very least, I don’t see the likelihood of significant upside for either stocks or bonds.
Likewise, this could very easily go south in a big way. The Fed would need to act. Would it be too late? Would the market even respond?
Liquidity Trader - Macro Liquidity- Fed and Banking
You Can See How Dark Matter and Dark Energy Drive Stocks Higher
by Lee Adler • • 0 Comments
Stock market analysis requires many disciplines. Unlike, physics, for example, it’s not rocket science. Hell, it’s not even science. But while physicists and astrophysicists understand more and more about how the universe works, there is much more that they don’t understand. For every theory that they confirm, more questions arise.
They say that approximately 80% of the mass of the universe is “dark matter.” They don’t know what it is. And there’s “dark energy,” that they don’t understand either. They see their effect, but they can’t see the cause, and don’t know what either of them is. So they observe and measure the effects, and make predictions and develop theories based on that.
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Liquidity Trader - Macro Liquidity- Fed and Banking
The Composite Liquidity Indicator (CLI) Says Honor Thy Father and Thy Mother
by Lee Adler • • 0 Comments
Macro Liquidity continues to bulge. The stock market has followed. It became oversold versus the surge in liquidity that the Fed initiated in March 2020. And it hasn’t looked back since. Should we expect to see stock prices become overbought again before the next big crash?
Liquidity Trader - Macro Liquidity- Fed and Banking
Here’s Why Front Loaded Stimulus Will Be Catastrophic for the Market
by Lee Adler • • 0 Comments
Both bonds and stocks have weakened over the past 2 weeks. It’s a sign that the Fed isn’t supplying enough QE. We’ve known for a long time that it wasn’t enough to support twin bull moves in both asset classes. Have we reached the tipping point where it’s insufficient for either to move higher while…
Liquidity Trader - Macro Liquidity- Fed and Banking
The Monster In the Room Is Not Make Believe
by Lee Adler • • 0 Comments
Back in September I wrote to you about why I was giving up on the banking system indicators. I’ve reposted that rant in an addendum to this report. Essentially it boils down to this. Every time there’s a critical problem in the banking system due to banker malfeasance, the Fed steps in to paper it over and reward the criminals.