Category Archives: Blog

Fundamental State of Matter

A Liquid – has a definite volume but no fixed shape.

The World got even more liquid over night. The PBOC joined the ranks of global CBs and governments embracing the fallacy of a Liquidity Trap. Grey-hairs love to oscillate between inflationary fears and “pushing on a string”. We continue to believe it is the system infrastructure that is damaged not the “volume” of its liquidity.( see  Ad Nausea earlier postings)  Whether the Fed’s balance sheet, the ECBs threats or the PBOC pump, the “shape” of the liquidity is not calibrated correctly.

The Modern Monetarists continue to advocate the view that if you aren’t getting the desired results, you simply need to do MORE. The truth is the Globe wasn’t running at stall-ish speed because it lacked liquidity. Now, there’s more of it. Perhaps, when this proves feeble too, we’ll start working at changing the structure of the “vessel” rather than the quantity in it.

Classical Thursday

30 minute atr
240 minute atr
daily pivots
weekly pivots
upside retracements
downside retracements
about to break out of the range?
regresssion chanells
price support and resistance
On the economic calendar:-
08:30 Consumer Price Index (Consensus -0.1% v Prior 0.1%)
          Jobless Claims (Consensus 284 K v Prior 290 K)
09:45 PMI Manufacturing Index Flash (Consensus 56.5 v Prior 56.2)
          Bloomberg Consumer Comfort Index
10:00 Philadelphia Fed Survey (Consensus 18.0 v Prior 20.7)
          Existing Home Sales (Consensus 18.0 v Prior 20.7)
          Leading Indicators (Consensus 0.5% v Prior 0.8%)
10:30 EIA Natural Gas Report
11:00 3 Month Bill Announcement
          6 Month Bill Announcement
          2 Year FRN Announcement
          2 Year Note Announcement
          5 Year Note Announcement
          7 Year Note Announcement
13:00 10 Year TIPS Announcement
16:30 Fed Balance Sheet
          Money Supply
Speaking today:-
07:45 Daniel Tarullo
10:00 William Dudley
13:30 Loretta Mester
20:30 John Williams


More BS About Oct 15

Another day…another weak story on the Treasury “Crash Up” of Oct. The promulgated meme is that “There was record volume so everything is fine.” This is an argument only the head of the CME Group could love, oh wait , HE’s THE ONE THAT MADE IT !

That the Ultra Bond went up 9 points on roughly 165 contracts is never mentioned. Abnormally large volume after the crash up is to be expected. The real question is: Why do exchange officials and regulators persist in selling this false narrative? IF, they truly believe this falsehood, we are in bigger trouble than thought because the leaders and officials of the industry are ignorant.

Everything is NOT ok in the trading of US Treasury securities and futures. The reasons are a mulligatawny of LSAP, regulatory change, electronic platforms and ZIRP.  Rates fell in the Oct seizure but the next disruption could be in the other direction. We got a glimpse of the carnage that could cause in the Taper Tantrum. In the meantime, people will keep telling you there’s nothing to see, move along, everything is fine. It reminds me of the Mayor in Jaws: They’re not going to look inside and have the little Kitner boy spill all over the dock.