Excellent discussion last night after I had gone to bed. For those of you unaware I’m in Your Rope and it is 6 hours later here than back home in ETUS.
Term and Type: 1-Year 11-Month FRN
High Discount Margin: 0.055%
Total Tendered: $62,752,279,200
Total Accepted: $22,000,228,200
Really what else can you call a market that does this with 30 million unemployed, as many unable to pay rent or the mortgage, some starving, and thousands dying every week from a virus that the Regime keeps trying to cure with bullshit fake remedies.
Sickening.
But none of that matters. There’s only one thing that matters.
The Fed buys the paper from Primary Dealers. The dealers act as middlemen or straw men, acting on behalf of the Fed.
Yesterday we left with a couple of the intraday cycle projections pointing to around 3440 on the ES fucutures. Well here were are in the wee hourse, and voila! Done!
Will it still be there in 5 hours or so when NY opens? Stay tuned.
Is it a breakout or a blowoff top? The 5 day cycle projection is 3435. Hey, they can count.
The Fed bought $1.73 billion in Treasury coupons from Primary Dealers today. There’s more to the story.
The Fed buys the paper from Primary Dealers. The dealers act as middlemen or straw men, acting on behalf of the Fed. The dealers purchase newly issued bills notes or bonds from the US Treasury. They in turn sell that paper to the Fed with a markup. That markup is their skim.
The money that the Fed deposits in payment is then their cash to use for trading whatever they want. Usually that includes a big slug of equities, in addition to Treasuries and whatever else they make markets in.
Here’s what they did yesterday.
I have this weird feeling like we’ve been here before.
I can’t quite put my finger on it.
That was yesterday’s lesson. Here’s today’s.