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Member since: Tue May 13, 2014, 06:50 PM
Number of posts: 5,582

Journal Archives

DOW 26788

Previous close 26825. 52 wk high 27398. 52 wk low 21712. Today's low 26782. High 26946.

NASDAQ : 8104 ▼

S&P : 2996 ▼

Soybeans : 9.34 ▲

Oil WTI : 54.21 ▲

DOW 26825

Previous close 26770. 52 wk high 27398. 52 wk low 21712. Today's low 26747. High 26852.

NASDAQ : 8162 ▲

S&P : 3006 ▲

Soybeans : 9.34 ▲

Oil WTI : 53.45 ▼

Nice up day.

DOW 26770 for Friday 10-18-19

Previous close 27026. 52 wk high 27398. 52 wk low 21712. Today's low 26770. High 27018.

Last Friday close 26815.

NASDAQ :8089 ▼

S&P :2986 ▼

Soybeans : 9.34 ▲

Oil WTI : 53.70 ▼

Enjoy the weekend everyone.

US-Brokered Ceasefire In Syria Already Shattered By New Turkish Airstrikes

In an entirely unsurprising development, it only took hours for Turkey to break the US-brokered deal for a 5-day ceasefire in northern Syria. The late Thursday newly inked ceasefire was announced by Vice President Mike Pence following a lengthy meeting with President Erdogan; it crucially involved allowing Kurdish fighters to evacuate battleground border towns and in exchange Turkey would agree to halt its offensive.

DOW 27026

Previous close 27002. 52 wk high 27398. 52 wk low 21712. Today's low 26970. High 27112.

NASDAQ : 8156 ▲

S&P : 2997 ▲

Soybeans : 9.31 ▲

Oil WTI : 54.05 ▲

Up day.

DOW 27002

Previous close 27025. 52 wk high 27398. 52 wk low 21712. Today's low 26943. High 27058.

NASDAQ : 8124 ▼

S&P : 2989 ▼

Soybeans : 9.29 ▼

Oil WTI : 53.28 ▲

QE4 Officially Begins

QE4 Officially Begins: Fed's First T-Bill Purchase Is 4x Oversubscribed Amid Massive Liquidity Demand

As previewed yesterday, moments ago the Fed concluded the first POMO - as in Permanent Open Market Operation, not to be confused with Temporary - from previously announced T-Bill purchases ($60 billion per month, $7.5 billion per operation), and what it showed is a confirmation of message sent by today's repo operation: there is an unprecedented demand for liquidity.

Specifically, the Fed purchased $7.501 billion in Treasury Bills out of $32.569 billion in T-Bills submitted. In other words, the operation was 4.3x oversubscribed, and when combined with the oversubscribed repo operation announced earlier today, confirms that there is a dramatic need for liquidity among the Primary Dealer community.

Also worth noting, the scramble to sell Bills to the Fed directly refutes what the FT reported earlier today that "money market funds that are among the largest holders of U.S. Treasury bills say they are reluctant to sell them to the Federal Reserve."


Looks a lot like those Obama days during the great recession.

DOW 27025

Previous close 26787. 52 wk high 27398. 52 wk low 21712. Today's low 26811. High 27120.

NASDAQ : 8148 ▲

S&P : 2995 ▲

Soybeans : 9.33 ▼

Oil WTI : 52.91 ▼

POMO Is Back: Here's What Treasury Bills The Fed Will Buy

As it pre-announced last Friday, the Fed will resume QE by purchasing $60billion/month in bills at least until 2Q 2020 starting on October 17. As has been widely discussed, and mocked, already, the Fed highlighted that these purchases were for reserve management only and have "no material implications for the stance of monetary policy", although how a restoration of financial conditions hit during the greater monetary policy experiment in history is not seen as, well, monetary policy is ludicrous.

The US Treasury’s general account at the Fed: after reaching a low of ~$125 billion in mid August, it has grown to ~$330 billion by the end of September.

Rebuilding the Treasury’s cash hoard will usually lead to a temporary liquidity drought. As we have previously discussed, the cash build-up beginning in August was quite likely one of the factors contributing to the recent repo market inconvenience.

Nevertheless, as the recent pace of demand deposit growth indicates, the effect is mitigated by accelerating bank credit growth and the fact that the Fed is expanding its balance sheet again.

As of September, growth in demand deposits and total bank lending has accelerated to 6% y/y and 6.6% y/y, respectively.

As an aside to this, the Fed’s balance sheet is actually expanding since July. In other words, the recent announcement of upcoming “reserve management/please don’t call it QE” activities seems to have been in reference to a process that has been underway for some time already.


Liquidity is the grease that keeps the wheels turning, there are more squeaky wheels around the world than there is grease. From the looks of it, the FED expects it will need much more grease sooner than expected.

"Hard To Obtain Liquidity" - South Korea's Largest Hedge Fund Halts Redemptions

As Bloomberg reports, Lime Asset Management, South Korea’s largest hedge fund with about $4 billion of assets, suspended withdrawals from more funds on Monday, freezing a total of $710 million of its portfolio, after the firm said last week it couldn’t sell assets fast enough to meet redemption demands.

The hedge fund halted an additional 243.6 billion won ($210 million) today after freezing funds worth 603 billion won on Oct. 10, Won Jong-Jun, chief executive officer at the Seoul-based firm, said in a press briefing this afternoon.

This also explains why GAM, Woodford, H20, Arrowgrass and many more funds (in the near future), will be similarly gated once their investors discover there is no liquidity to sell into and the only "real time" liquidity is offered to those who have a "first seller mover advantage", to wit:

If investors anticipate severe losses on the fund’s investments, they could be incentivised to “run for the exit” to be the first to redeem their shares.
The first-mover advantage in open-ended funds arises because losses on asset sales to meet redemptions are incurred by investors which remain in the fund.
As in a ‘bank run’, the asset manager is, in principle, forced to sell assets in a fire sale in order to meet its short-dated liabilities
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