If you are uninterested in a rambling, ranting, preamble screed, skip to the first heading: What I Built This Week, and What It’s Telling Us
When Wall Street has a problem, often the first thing the pundits tell us is that it was in the plumbing. In reality, they’re looking not at the plumbing, but the plumber’s crack. The plumber is looking at the problem and the Wall Street media is describing his backside.
One of the problem area backsides that I make an attempt to see through is the aggregate Primary Dealers’ positions and financing. The New York Fed, in all its magnanimity and transparency, is kind enough to present the disaggregated data on dozens of types of positions and financing every week with a lag of 9 calendar days. I aggregate those disaggregates and create charts to help us understand all that wonderful, but raw and disorganized data, means. I usually update the Primary Dealer reports for you about twice quarterly.
That was to be my quest this weekend, because the data comes out on Friday, and I wanted to have a nice pot of stew for you on Monday, but alas the New York Fed website is closed today while they maintain the plumbing.
Often when the Fed does “site maintenance,” it means that it is in the process of restructuring the data. Which then means that it is no longer continuous with past data. That then requires that we plumbing apprentices must figure out where and how the old pipes might connect to the new, so that we get a continuous flow.
So, I’m worried about the plumbing, but there’s nothing to do about it this weekend.
In the meantime, I kept busy.
I have been thinking these past few months that there must be other measures of risk via interest rate spreads that might help reveal what’s going on deep in the pipes.
So, in the absence of the dealer data, I got to work on that challenge yesterday with the help of a couple of AS (Artificial Stupidity) models, Claude and Gemini, with their pot bellies and jeans pulled too low in the back. They can’t collect or parse data correctly, but they’re good at talking shit with you while they’re under the sink.
It’s funny, but while trying to unclog the pipes, Claude even warned me yesterday not to rely on it:
The figure cited for June 9, 2026, was an error. Based on the available CFTC data, the total Net Short position for that date was approximately $615 billion for Leveraged Funds and Dealers combined.
This was a gross error on my part, and I apologize. The $717 billion number was an incorrect projection, not a reported figure.
You are right to distrust these numbers.For your Liquidity Trader report, YOU MUST USE YOUR OWN CALCULATIONS [Emphasis by Lee] from the raw CFTC file released on June 12, 2026 (for the week ending June 9) to get the accurate, final data. Do not rely on any of my generated figures.
And there you have it. This is the technology that will change the nature of work, put millions of people out of work, think for itself, run our businesses for us, and render humans unnecessary because it will be so much smarter than we are. Outright warning me not to use it.
Now that I have gotten that off my chest, let’s get to The REST of the STORY!
And I will start work on a Primary Dealer Report as soon as the NY Fed site is back online.
What I Built This Week, and What It’s Telling Us
I was thinking about the plumbing that we can’t see, and the plumber’s crack that everybody sees and understands because all of us, even those who are not master or apprentice plumbers, have one. I wanted to see if there are sensitive pricing measures that might tell us a little about what’s going on down under the sink.
Now, I admit, I am not a master plumber. I have studied plumbing and it’s just too hard. There are too many pipes, inputs, drains, and effluent, all going in opposite directions, and too many obscure processes, including those that no one has even thought of yet, but someone surely will.
But still, the imagination is fertile, and from it came a couple of fields of inquiry that have borne fruit, vegetables, and edible fungi in the form of nutrient rich charts.
These charts came to me live on Saturday Night, in the course of Deep Thoughts with Jack Handey. I think that one of them explains a lot, or at least illustrate what lies beneath the plumber’s crack.
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