Thursday, July 8, 2021

TREASURY TRIMS BILL AUCTION SIZES

 

Looks like the Biden admin has FINALLY thrown in the towel for July… “debt ceiling!” (yo we might as well call it “USD savings ceiling”) here we come…

Bubba Janet in summer session in Venice could care less…



(BTW this kid ‘DC’ is a good fintwit follow…)




7 comments:

Footsoldier said...

Powell destroyed my old one. I just put together another based on theory. Then I had to revise it. And I'm not done yet.


The first deceleration in short-term money flows since the March 2020 bottom, given the current trajectory, won’t occur until next month (August).

On the other hand, inflation, dismissing any change in velocity (the demand for money), won’t materially subside.


Parse date; real output; inflation
02/1/2020 ,,,,, 0.05 ,,,,, 0.03
03/1/2020 ,,,,, 0.20 ,,,,, 0.21
04/1/2020 ,,,,, 0.33 ,,,,, 0.40
05/1/2020 ,,,,, 0.40 ,,,,, 0.46
06/1/2020 ,,,,, 0.44 ,,,,, 0.50
07/1/2020 ,,,,, 0.44 ,,,,, 0.53
08/1/2020 ,,,,, 0.45 ,,,,, 0.56
09/1/2020 ,,,,, 0.45 ,,,,, 0.61
10/1/2020 ,,,,, 0.53 ,,,,, 0.68
11/1/2020 ,,,,, 0.77 ,,,,, 0.79
12/1/2020 ,,,,, 0.84 ,,,,, 1.26
01/1/2021 ,,,,, 0.65 ,,,,, 1.31
02/1/2021 ,,,,, 0.66 ,,,,, 1.41
03/1/2021 ,,,,, 0.70 ,,,,, 1.51
04/1/2021 ,,,,, 0.71 ,,,,, 1.60
05/1/2021 ,,,,, 0.78 ,,,,, 1.65
06/1/2021 ,,,,, 0.79 ,,,,, 1.77
07/1/2021 ,,,,, 0.76 ,,,,, 1.81 stocks peak
08/1/2021 ,,,,, 0.55 ,,,,, 1.79
09/1/2021 ,,,,, 0.27 ,,,,, 1.72


The FED’s models are slow to pick up changes in the economy. And their response is even slower. Fortunately there’s not much impact to R-gDp until the 1st qtr. of 2022.


The problem will occur as the Treasury uses up it TGA.
Liabilities and Capital:

Liabilities: Deposits with F.R. Banks, Other Than Reserve Balances: U.S. Treasury, General Account: Week Average (WTREGEN)


2021-06-30: 745.962


Untested, but on theoretically grounds, money flows point to the first upcoming inflection in the markets since last years March bottom. Of course, we don't know the reaction of the monetary authorities to a deceleration in the economy. We don't know if their models are accurate. Typically, they're slow to respond to any changes.


My model is not the only one to predict an upcoming inflection. There is confirmation in other methods. At the risk of being wrong, I still believe this model works. July 21st is the typical seasonal inflection point.

Salmo Trutto


https://seekingalpha.com/user/7143701/comments


Footsoldier said...

I like Mike's videos on the banks. He should do a course on H4 and H8. What important flows you can learn from them.

How to measure the flows that count that are used in transactions not savings. That increase GDP and investment in production.

For example when you Look Look at the H.8 release from September 7, 2018 and it shows (+) large CDs and (-) agencies.


September 7, 2018


H.8; Page 1

Assets

Line item: 1 Bank credit


page 5
Line item: 35 Large time deposits


Memoranda

Line item: 43 U.S. Treasury and agency securities,



The upshot is that the DFIs are shedding safe assets and replacing them with higher yielding earning assets. Is that a correct assumption to make or is there more to it than that ?







Footsoldier said...

When you look at the moneyness pyramid how to measure the most liquid flows that make a real difference to the economy that are used for transactions. Discount the ones that are frozen in time deposits that add nothing to GDP.

Vainglorious Interest Rate Manipulation = Monetary Madness


https://seekingalpha.com/instablog/7143701-salmo-trutta/5178213-vainglorious-interest-rate-manipulation-monetary-madness



1966 Interest Rate Adjustment Act



https://seekingalpha.com/instablog/7143701-salmo-trutta/5265714-1966-interest-rate-adjustment-act



1966 Interest Rate Adjustment Act II



https://seekingalpha.com/instablog/7143701-salmo-trutta/5265717-1966-interest-rate-adjustment-act-ii



What are the myths and truths ?


Is it a good idea to have interest paid on reserves and allow banks to lend the way they do nowadays ?


Does what Mosler suggest actually go far enough ??







Matt Franko said...

Foot what the Fed is doing today is a convoluted Rube Goldberg lash up because identity fraud glorified house frau Pocahontas is too stupid and uneducated to agree to any regulatory adjustments…

Footsoldier said...

Matt, it seems to me the banks run the show.

Have done for a while now.

Whenever you Look at the markets and think what Is the FED thinking. That's the wrong way to think about it.

The way to look at it is what do the banks want. If the banks want deficit reduction they get it. If the banks want rate hikes they get it. If the banks want something privatised they get it. When have the banks never got what they wanted in the end.

So comming out of the virus what is it the banks want and what do they need. They will get. If they don't they will find a way to make it happen.

Why large deficits are bad for banking profits

https://michael-hudson.com/2017/03/why-deficits-hurt-banking-profits/


So the way I see it as the economy returns to normal. If you keep asking yourself what do the banks want there is an 80% chance of that happening. What the government wants is irrelevant and have to stand in line until the banks have been served.

Footsoldier said...

Chris Cook is saying the oil market is going to get interesting when China starts dumping their oil on the markets.

https://mobile.twitter.com/cjenscook/status/1405142207993192453

It peaks around WTI Aug 21 expiry late July, maybe $75 > $80/bbl (depends on $/Yuan rate). Then three month rapid downcycle followed by nine months back up the hill again.


Stinson is saying lumber will hit $ 1000 average.


https://mobile.twitter.com/LumberTrading



Worth following those two when it comes to oil and Lumber.


Footsoldier said...

Republicans tend to be oil presidents and democrats tend to be wall street presidents.


Be interesting to see how that dynamic changes due to climate change.