The line items of the Fed’s Pandemic Panic Emergency Programs get a lot of media and analyst attention these days. What a waste of time and energy. Let me explain why.
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Liquidity Trader - Macro Liquidity- Fed and Banking
Dealers Don’t Care That Fed is Tightening, But They Will on Friday
by Lee Adler • • 0 Comments
We’ve watched this bizarre scene unfold where the Fed is gradually reducing QE, the Treasury keeps pounding the market with new supply and stock prices keep rising. Here’s how they did it, and what changes ahead will force a change in the outlook.
Liquidity Trader - US Treasury Market Trend Supply and Demand
Dealer Dementia, Payback Delayed but Not Denied
by Lee Adler • • 0 Comments
I’ve marveled at the ability of the players to keep stock prices rising despite the reduction of Fed QE, and the continued pounding of Treasury supply on the market. Even more amazing is the fact that the rally in stocks has NOT come at the expense of the Treasury market. The Treasury market has managed not to blow up.
Liquidity Trader - US Treasury Market Trend Supply and Demand
Primary Dealers Go Hog Wild Net Long Treasuries
by Lee Adler • • 0 Comments
We may still find out just how bad things are. Because the dealers remain leveraged to the hilt. And there’s one more thing.
Liquidity Trader - Macro Liquidity- Fed and Banking
Here Comes the Blowback as MBS Monthly Settlements End
by Lee Adler • • 0 Comments
We knew this was coming. $265 billion in MBS settlements for May are almost done. Now we reap the whirlwind. Here’s what to expect and why it’s time to GTFO.
Liquidity Trader - Macro Liquidity- Fed and Banking
Treasury Issuance Catches Up With QE and That’s Not Good
by Lee Adler • • 0 Comments
Treasury issuance has caught up with QE. There are no more excess funds lying around for dealers to use to mark up stock and bond prices. The balance has shifted. It’s not as bullish as it was, that’s for sure. And it could get much, much worse in the weeks ahead before the Fed reacts.
Liquidity Trader - US Government Revenues
You Have No Idea How Bad This Really Is
by Lee Adler • • 0 Comments
In normal times, the Federal Government has a revenue windfall in April, and runs a large surplus for the month. Revenues are typically at least 140% of outlays. Even more in good years.
Revenues covered just 24% of outlays in April. We borrowed 76 cents of every dollar the Federal Government spent last month.
We knew this was coming. The questions now are how long it can last, when it will start to recover, and whether it might get worse.
Liquidity Trader - Macro Liquidity- Fed and Banking
There is No Long Term
by Lee Adler • • 0 Comments
Macro liquidity has slowed slightly in recent weeks as the Fed has taken its foot off the accelerator. But it continues to grow at an historic pace. What does that mean for the short term and the long term.
Oh, wait.
There is no long term.
Liquidity Trader - Macro Liquidity- Fed and Banking
Fed’s Curve Flattening Starts To Flatten Stock Prices
by Lee Adler • • 0 Comments
The Fed has cut back its POMO purchases to an average of $8 billion per day of Treasuries and $6 billion of MBS this week. That’s down from $10 billion and $8 billion last week, and hundreds of billions in the peak of the panic in April.
The effects of that are beginning to show up in stock prices. Be prepared because here’s what happens next.
Liquidity Trader - US Government Revenues
Federal Budget Deficit Hit A Trillion A Month in April
by Lee Adler • • 0 Comments
The Federal deficit hit $1 trillion in April. That’s a cool 1,500% increase year to year. That’s for one month. Here are the current horrible numbers, along with the immediate outlook, and what it means for stocks and bonds.