Well, it’s Thursday, which means the latest Fed Spread data is out. At the top is BTFP, which is scumbag Janet Yellen’s free handout of billions to her banking friends, the only friend she’s got. It has never been higher, and even though by her own vile, repulsive mouth she bleated that it would expire in March, I assure you the old biddy is going to extend it, because there’s no way in hell her friends are going to be able to pay back the literally hundreds of billions of dollars she has handed out to them. If the public wasn’t so stupid, they would have her in prison (or worse), but they are, so she isn’t. And so it goes.
The reverse repo continues to crash to zero.
And, for the moment, quantitative tightening continues apace, although it will surely be aborted sometime next year due to some imagined emergency.
By way of Chart Lab, I have improved the Fed Spread, incorporating the wretched Yellen’s criminal scheme, and it is moving along more slavishly to the S&P. The index is still overvalued, but not by much, given the massive influx of billions that the banks are still able to get by pretending that their devastated bond portfolio is actually worth par value, as the rules of the BTFP dictate.