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Category: 1 – Liquidity Trader

Reports on the Fed and Treasury, Primary Dealers, real time Federal tax collections, foreign central banks, US banking system, European banking system, and other factors that affect market liquidity. Resulting market strategy recommendations. 7-8 reports each month. Click here to subscribe. 90 day risk free trial!

Backed By Lansky, Dealers Do Enough To Keep The Players at the Tables

The Meyer Lansky like Fed has cut back QE, but Treasury supply has also receded. So the Fed is still funding most new issuance, either by direct purchase of Treasuries, or indirect funding via purchases of MBS. That has allowed the dealers enough flexibility to keep the players at the gaming tables. Are they being set up for the kill?

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Primary Dealers Deleverage and Grow Cautious

As the Fed has cut back on QE, Primary Dealers have also cut back their inventories of Treasuries and the leverage that they use to finance them. That’s not bullish. Here are the details and a few charts along with a suggested strategy to play the dealers’ game, not the one they want you to play as they set up new traders for the kill.

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The VIrus is the Economy

The Virus Is the Economy

Common sense says that as case numbers increase, tax collections would fall and vice versa, REGARDLESS of whether governments imposed lockdowns. So my expectation was that as governors across the country lifted restrictions, case numbers would rise, and tax collections would fall.

Well here we are.

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Act on real-time reality!

Beware of the Rub That Will Irritate Markets

We know that total liquidity is still growing. The Fed is still printing and pumping money into the system at an historic rate. That rate is well above the norms of the original QE back in 2009-10, but well below the peak panic levels of March and April. The Fed has been dialing it back from the extreme pumping it reached at the market bottom in March.

Ay, but theres’s a rub, and it’s not barbecue. It’s an irritant. And the markets won’t like it.

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These Real Time Charts Show US Economy Contracting Again in June

The data is noisy, and week to week the changes may not mean much. But in some weeks, it’s obvious that it’s part of a bigger trend, whether confirming or indicating change. Even if there are just hints, this information can be incredibly useful. It is useful because it tells us exactly what the big picture is, while Wall Street economists are still scratching their asses and trying to figure out what the government statistician manipulated data means. And the first report from that data is still 13 days away.

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IF YOU WANT TO KNOW WHAT’S HAPPENIN NOW, before even the Street does, read Lee Adler’s Liquidity Trader risk free for 90 days!

Act on real-time reality!

Long Live the Dead Cat Bounce – It’s Dead

The Monthly Treasury Statement for May confirms that the economy rebounded during the month, but more recent data through last week suggests that the rebound has already expired. Signs of renewed weakness come when the numbers are still far from a full recovery. The economy is beginning to weaken again, starting from weakness.

That’s relevant because it means that the Federal government will need to continue to issue massive amounts of debt. It may not be quite as much as in March and April, but it will still be at least double past peak levels.

We also know that the Fed has sharply cut the amount of that debt that it is directly absorbing or financing.

Here’s what this means for your investing strategy.

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