It is Thursday evening, and the sounds in my ears are those I haven’t heard in a long while: countless cicadas, chirping on full blast. It’s a nice bit of incidental music while I compose some content for you good people.
Being Thursday, that means we can catch up on the liquidity data. The Antichrist Yellen handed out more free cash to her banking buddies, although the pace has slowed to virtually nothing.
Her checkbook is starting to shrink, and Treasury shells out dollars it doesn’t really have. Indeed, even I lost track of how huge our debt is, as it is approaching $33 trillion.
The Reverse Repo has fallen out of favor.
And quantitative tightening, amazingly, is staying right on track. If they keep this up, they’ll shed their assets completely just about the same time we establish our first successful colony on Mars.
Now, I realize “the formula” is outdated since Yellen created her illegal BTFP program, but all the same, I present to you the Fed Spread, showing the delta between present price levels and where they should be. It is a ball-numbing 600 points. Never, ever bigger.
