Archive for the ‘Lee’s Free Thinking’ Category

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less cases.

So let’s review the states that have recently had the biggest numbers in order of total population. All charts are from the COVID Tracking Project.

California

California – New tests were a bit lower this week, but apprently still in an uptrend. New cases hit a record of 12,807 on Wednesday, and came off a bit, to 12,040 on Thursday,July 23.

Current hospitalizations are still hitting new highs every day, rising to 8820 on Thursday.

New deaths hit a new record of 157 on Thursday, a breakout after consolidating near the highs since July 8.  So in California we still see an uptrend in all key data.

Case numbers first broke out and accelerated into the current trend on June 19. Hospitalizations broke out on June 23. Deaths broke the old highs on July 8.

California is the most populous state in the US, with 39.5 million people. So its total numbers are big, but a little misleading. On a per capita basis, its numbers are much lower than Texas, Florida, Arizona, and Georgia. All charts below are on a per capita basis for comparitive purposes from state to state. California is doing a little better than the other 3.

Governor: Gavin Knewsomething (D)

California COVID 19 Data

Click to enlarge

Texas

The second most populous state is Texas.

Testing still appears to be in an uptrend, but the numbers of tests have dropped sharply this week. They’ve


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These Charts Show COVID 19 Is Spreading in the US and Will Kill the Economy

 

These Charts Show COVID 19 Is Spreading in the US and Will Kill the Economy

Courtesy of  

The COVID 19 pandemic is, predictably, worsening again in much of the US. Only the Northeast, and to a lesser extent some Midwestern states, have been consistently improving. And that trend could also reverse as those states fully reopen.

The problem in the US seems to be widespread public resistance to recommended practices of social distancing and mask wearing. In countries where these practices have been practiced universally, they have shown to halt the progression of the disease.

The US doesn’t have the ability to do that. Each of the 50 states had and has different rules. They instituted and lifted restrictions at different times. The public in each state has a different level of willingness to comply with public health restrictions. Infected people have been able to travel freely between states with different degrees of restriction and compliance, promoting the spread of the virus.

As a result, a number of states, including the three most populous, with 90 million people, are in increasingly bad shape with the pandemic trend. Remember that thing about the virus subsiding when warm weather comes? Well California, Arizona, Texas, and Florida, are pretty damn warm right now, and their COVID case numbers are exploding.

As a result of the continuing spread of the virus, the US economy and Federal tax revenues are unlikely to recover until there’s an effective treatment or vaccine. We don’t know when that will be, despite optimistic predictions that it will happen next year.

Until the virus is largely conquered, Federal debt issuance is likely to continue to be a problem for the financial markets. Federal spending will necessarily need to continue at much higher levels. Federal revenues will remain severely depressed. Deficits will remain enormous, and the amount of debt that the Federal Government will need to issue in the market will continue at a pace of hundreds of billions a month. It will be twice the level, or more than twice the level, of past peak supply of Treasury paper hitting the market.

With COVID cases spreading rapidly in much


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Jobs – Big Picture and Good News/Bad News Market Reaction in Stocks and Bonds

 

Jobs - Big Picture and Good News/Bad News Market Reaction in Stocks and Bonds

Courtesy of Lee Adler 

Nonfarm Payrolls- Not Seasonally Adjusted - May 2020

Total nonfarm payrolls as reported by the Trump Regime Bureau of Liar Statistics rose 2.25 million on a not seasonally adjusted basis, before downward revisions for March and April. This is based on a comparison of the year to year change for May vs. the year to year change for April.

Nonfarm Payrolls Table - Not Seasonally Adjusted - May 2020

The previously reported figures for March and April as reported last month were revised down by 1.2 million. Including the downward revisions for March and April the net gain was 1.2 million. This compares with a gain of 2.5 million in the BLS headline number.

Traders saw this as unequivocally good news. The 3-day cycle projection rose to 3185 on the reaction to the news.

In the Treasury market, not so much. 

10 Year Treaury Yield Chart

This is catastrophic.  Full story here:

We’ve watched this bizarre scene unfold where the Fed is gradually reducing QE, the Treasury keeps pounding the market with new supply and stock prices keep rising. As the Fed has tightened, there’s now far less QE than the amount needed to fund all the Treasury borrowing. I thought that meant that stock prices would come under pressure.

The only pressure we saw was a slowing in the uptrend. Which is mind bending, given the extant circumstances. How’d they manage that? In short, the residual of QE driven animal spirits, and repo. Short of direct Fed cash to fund their stock markup and distribution operations, the dealers sharply increased their repo borrowing in an apparent effort to keep the rally going. So far, it has worked. But conditions will change this month.

Over the next week dealers get the benefit of Treasury supply temporarily being lower than it has been. Then on June 11, the Fed holds its regular mid month settlement of its MBS [mortgaged backed securities] purchases from the dealers. This month it will be less than half what it was in May, so there shouldn’t be the fireworks we saw then. The dealers just won’t have as much money to play with.

For more from Lee, check out his Liquidity Trader.

 

 





Swedish Killing Machine Lessons On Lockdown vs. No Lockdown

 

Swedish Killing Machine Lessons On Lockdown vs. No Lockdown

Courtesy of Lee Adler

I put together this data today on what happens when a country foregoes lockdowns. Sweden made that choice from the beginning. It’s demographically similar neighbors, Denmark, Norway, and Finland had strict lockdowns.

As you can see, the three neighbors have gotten their outbreaks under control. Sweden has not yet, although case numbers are coming down.

The 3 neighbors have started to loosen restrictions and reopen businesses.Their combined population is 16.7 million. They’ve had 26,346 cases and1,106 deaths. Sweden has 10.1 million people, and has had 33,843 cases and 4,029 deaths. The 3 amigos currently have less than one tenth the number of active cases as does Sweden. Sweden had 7 times the number of new cases on Monday as the 3 amigos.

A couple of observations. Finland and Norway are low density countries like Sweden. It’s understandable that they would do better than Denmark. But their case numbers per capita were less than half of Sweden’s. Their deaths per capita were around one eighth of Sweden. And yet Finland tested from 50% more people per capita than Sweden and Norway tested more than twice as many. It suggests that Sweden’s case numbers and deaths are understated relative to actual cases and death.

As if the official numbers aren’t bad enough.

Denmark has 6 times Sweden’s population density. If there was any question about the value of lockdowns it would have shown up in this geographically tiny, high density country. Its case number per capita were only 58% as great as Sweden’s, and its death rate was 1/4 of Sweden’s. And Denmark tested 4.5 times more people per capita than Sweden did.

Sweden chose death. And it succeeded. It’s still succeeding. Did it gain anything in terms of jobs? Sweden’s April unemployment rate was 8.2%. That’s up from 7.1% in March, and 6.2% in April 2019. Denmark, Finland, and Norway, haven’t been posted yet for April. Those numbers should be out this week.

Their numbers should be materially worse than Sweden’s. What a shock it would be if they aren’t. Sweden would have killed thousands of people for nothing.

Just a little case


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US Southern States COVID19 Cases – Let’s Give Credit Where Due

 

US Southern States COVID19 Cases – Let’s Give Credit Where Due

Courtesy of  

The number of new COVID 19 cases has been falling in the Northeast, but the South is not having the same experience. The number of new cases per day in each Southern state has been rangebound for the past month.

And that’s assuming that the numbers haven’t been manipulated. We know that in Georgia’s case at least, they have been. And there are suspicions about Florida as well, as the State now engages in a smear campaign against the fired employee who built its much praised COVID19 database and dashboard.

The charts below show the total number of cases normalized by population on a cases per 100,000 basis.

To avoid crimping the scale of the chart below for the bulk of the states, I have plotted Louisiana separately.

Texas (blue line) started slow but has been accelerating. It has caught up with South Carolina. The two lines are now at the same point on the graph.

Charts Source: https://datausa.io/coronavirus

COVID19 Cases US Southern States

Louisiana had a huge early surge due to Mardi Gras. Since reaching 450 cases per 100,000 its growth rate has been similar to Mississippi’s. Seen another way, Mississippi’s case growth has mirrored Louisiana’s post Mardi Gras surge.  

I wondered why Mississippi has caught up with Louisiana’s case growth rate. The answer may lie in the fact that Missippians have gone back to shopping and recreational activities more than Lousianans have.

Florida is middle of the pack in terms of total cases per capital. I wondered why it has done better than some states. The answer, again, appears to be that Floridians stayed home. Retail, restaurant, and recreation facilities were allowed to reopen at reduced capacities on May 4 in all but Dade, Broward, and Palm Beach Counties. They reopened May 18. Google mobility reports show Floridians going to retail stores or recreation sites remained down 33% from normal levels as of May 20.

The next biggest difference is Louisiana, which is down only 26%, then Texas, down 23%. The remaining southern states are down less than…
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Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have been added then the repo market will go back to normal. Everyone seems to assume that demand in the repo market has not gone up and has no analysis of what’s driving repo demand. What’s your take?

Also, I talked to a money market PM who thinks the Fed will need to create a standing repo facility so that other FDIC insured banks can get access to repo market. He said the root problem is that JPM, GS are not lending their cash to the banks who don’t have access to repo. He thinks there is no chance of a legal change to the ‘liquidity coverage ratio’ during an election year. Thoughts?

What are the ramifications of a standing repo facility? I certainly don’t know.

Dave

I want to thank Dave for sending me these questions. It reminds me that I need to keep hammering home the message that I believe, rightly or wrongly, is the correct one.

Hammering Home the Message

David, your sources don’t know what they’re talking about. They’re blowing it out their ass. They’re not talking to the Fed or the Primary Dealers. They’re talking to each other. They don’t know, and neither do I. I just track the data that I think is important for correctly identifying and staying with the market trend as it stands now.

What difference does it make anyway? Do you think they know when the Fed will stop? I sure don’t know. And I don’t think they do either.

But it doesn’t matter. The market will react when the Fed stops. Or the market will break before the Fed stops. We don’t need to make wild guesses. So what if guess right and we’re early. The stock


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Fed Not QE 2020 Vision

 

Fed Not QE 2020 Vision

Courtesy of 

Fed QE will continue in 2020.

2019 marked the start of the Fed’s new program of QE. We refer to it by its official name of “Not QE.” Because Jerry said so. Out of deference to the central bank we have fallen in line.

The Wall Street media says the Fed started Not QE to correct a little problem in the “plumbing” of the system. That little problem has now required that the Fed add nearly a half trillion in cash to the trading accounts of the Primary Dealers. That’s for them to then disseminate into the banking system.

The Fed doesn’t tell the dealers how to do that. It just hands over the cash to the dealers when it trades with them via Permanent Open Market Operations (POMO – outright purchases), or lends it do them via Temporary Open Market Operations (TOMO – repos). The Fed then leaves it up to the dealers what to do with that cash.

They, of course, use it to do what dealers do. They trade. They accumulate inventory, attempt to mark it up, and distribute it.

No doubt another half trillion in Fed Not QE is coming in the first half of 2020 to help them do that. And a half trillion after that, and so on and so on.

The Fed has no choice. It must do QE in 2020, and for as long as we can tell.

Fed Not QE 2020 to Boost Stocks Again

The first place that Fed QE will go in 2020, like every other year, will be into the financial markets. That usually means the stock market.

The dealers, being in the business of accumulating, marking up, and distributing financial assets at higher prices (they hope), then accumulate the assets that are easiest to mark up. With their PR machines at CNBC, the Wall Street Journal, and Bloomberg running full blast, 24-7, that usually means stocks. But they’ve had a little problem with marking up their bond inventories. They haven’t been able to mark them up. Lately they’re losing money on them.

But…
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Powell Spews Baby Poop In Attempt To Reassure Investors

 

Powell Spews Baby Poop In Attempt To Reassure Investors

Courtesy of  

Let’s look at a few of Chairman Pow’s words at yesterday’s press conference. Please read them and tell me whether this sounds to you like a man who doesn’t understand what he’s doing. Or if you think he’s deliberately pulling words out of his ass, stringing them together, and spewing them from his mouth in an effort to gaslight the investing public.

I’ll take the latter. The Fed is in the propaganda business. It knows what it is doing. Double talk, lies, and utter bullshit are its stock-in-trade.

Powell’s spew was in response to a question from the confused but affable Michael Mckee of Bloomberg, who no doubt served up the question on a suggestion from his Fed handlers.

McKee: The BIS concluded in September that the repo spike was not a one off confluence of random events but reflected structural and regulatory issues that could lead to a recurrence. 

This is the utter nonsense that the Fed and Primary Dealers who own Wall Street want you to believe. The fact is that the dealers and banks could no longer continue to help finance the burgeoning Federal debt. They had reached the end of their willingness, and/or their ability, to continue to use repo funding from each other to fund the growing flood of Treasury issuance.

McKee: I’d like to ask you if you agree with the BIS findings and given that we are approaching year-end for the markets will you be taking any extra steps to ensure that funding is available in the repo and FX swaps markets.

There was a report yesterday, Credit Suisse suggesting there’s a good chance that we will see disruptions and one of the reasons they December 11, 2019 put it forward is that the Fed is at this point buying only T-bills and the market wants to sell coupons, do you have any plans to sell coupons?

I believe that McKee meant to ask if the Fed has any plans to buy coupons, not sell them. But his question was almost as nonsensical as Powell’s response,


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Chart Shows the Fed Ramping Up Not QE – Funding Almost All Treasury Issuance

 

Chart Shows the Fed Ramping Up Not QE – Funding Almost All Treasury Issuance

Courtesy of Lee Adler, Wall Street Examiner 

The Fed is ramping up “Not QE” .

The Fed bought $2.2 billion in notes today in its POMO, “not QE,” operations. Actually $2.15 billion because they sold back a whole $50 million. Must have been a little glitch in the force.

This brings the Fed’s total outright purchases of Treasuries to $170 billion since it started Not QE, on September 17.

It also did $107 billion in gross new repo loans to Primary Dealers to buy Treasuries, against $94 billion in expirations, increasing total TOMO repos outstanding to $245 billion.

So the Fed has done $415 billion in QE since it started Not QE. The Treasury has issued $517 billion in net new paper since that fateful day.

Fed Says Not QE but Really Is

Powell says it’s Not QE with a straight face. Just another garden-variety, lying, sociopath central banker.

The Fed is buying outright, or lending the Primary Dealers the money to buy 80% of all new Treasury issuance. If that ain’t monetizing the debt, then I’m not in Lisbon.

 

Apparently, I am.

And If that ain’t QE, then my name ain’t Lee.

It is, therefore I am.

Read Lee Adler’s Liquidity Trader risk free for 90 days! Satisfaction guaranteed or your money back.





NY Department of Welfare Announces Increased Subsidies for Primary Dealers, Thank God!

 

NY Department of Welfare Announces Increased Subsidies for Primary Dealers, Thank God!

Courtesy of , Wall Street Examiner

Here’s today’s press release (11/14/19) from the NY Fed verbatim. They’ve announced that they will be making special holiday welfare payments to the Primary Dealers this Christmas season. I have highlighted the relevant text.

The Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York has released the schedule of repurchase agreement (repo) operations for the monthly period from November 15, 2019 through December 12, 2019. In accordance with the most recent FOMC directive, the Desk will continue to offer at least $35 billion in two-week term repo operations twice per week and at least $120 billion in daily overnight repo operations.

The Desk will also offer three additional term repo operations during this calendar period with longer maturities that extend past the end of 2019. These additional operations are intended to help offset the reserve effects of sharp increases in non-reserve liabilities later this year and ensure that the supply of reserves remains ample during the period through year end. They are also intended to mitigate the risk of money market pressures that could adversely affect policy implementation. The Desk will adjust the timing and amounts of repo operations as necessary to maintain an ample supply of reserve balances over time and based on money market conditions, consistent with the directive from the FOMC.

Detailed information on the schedule and parameters of term and overnight repurchase agreement operations are provided on the Repurchase Agreement Operational Details site.

NY Fed Department of Welfare and Mendicant Services

The Fed will offer the dealers AT LEAST $120 Billion per day in overnight repos. It will offer AT LEAST $35 billion in 8, 13-15 day term repo operations. And it will offer a total of AT LEAST $55 Billion in special Christmas Giving Financing, which will almost certainly never need to be paid back.

As I pointed out in an earlier post, the Fed is effectively monetizing the Federal Budget Deficit, dollar for dollar. In addition, it is ensuring that the Dealers can carry their bloated, overstuffed inventory of Treasuries until hell freezes over, and will never,…
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Phil's Favorites

A second COVID-19 wave? Here are 6 lessons from the first

 

A second COVID-19 wave? Here are 6 lessons from the first

A man wearing a face mask to curb the spread of COVID-19 walks past a temporary Pride art installation in Vancouver on Aug. 3, 2020. THE CANADIAN PRESS/Darryl Dyck

Courtesy of Loren Falkenberg, University of Calgary and Jillian Walsh, University of York

As COVID-19 spread across the globe, governments looked to epidemiologists to slow its transmission.

Without a vaccine, large-scale testing capacity and sufficient critical-care beds, epidemiologists pushed...



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Biotech/COVID-19

A second COVID-19 wave? Here are 6 lessons from the first

 

A second COVID-19 wave? Here are 6 lessons from the first

A man wearing a face mask to curb the spread of COVID-19 walks past a temporary Pride art installation in Vancouver on Aug. 3, 2020. THE CANADIAN PRESS/Darryl Dyck

Courtesy of Loren Falkenberg, University of Calgary and Jillian Walsh, University of York

As COVID-19 spread across the globe, governments looked to epidemiologists to slow its transmission.

Without a vaccine, large-scale testing capacity and sufficient critical-care beds, epidemiologists pushed...



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ValueWalk

Coronavirus stimulus checks talks break over partisan fight

By Michelle Jones. Originally published at ValueWalk.

August 8th update: The likelihood of Coronavirus stimulus checks coming in the near future has dampened. Late Friday, Trump tweeted out that the Democrats were mostly interested in bailing out blue (Democratic) states, which are in deep date. Whatever, ones feelings on the matter the fact that there is public feuding over other crucial details does not bode well for checks anytime soon.

Editor’s note: This article contains the latest news on the coronavirus stimulus package. It’s updated regularly with news about coronavirus stimulus checks and related issues.

August 7, 2020 Update: Americans’ hope of a second round of coronavirus stimulus checks is drying up again as talks between the White House and key Democrats collapse. Although the two sides agree that they should send a sec...



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Zero Hedge

House Ethics Committee Finds Rashida Tlaib Violated Campaign Finance Rules

Courtesy of ZeroHedge View original post here.

Authored by Jack Philips via The Epoch Times,

The House Ethics Committee found Rep. Rashida Tlaib (D-Mich.), a member of the so-called “Squad,” violated campaign finance rules by receiving a campaign salary after she was no longer a candidate.

...



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The Technical Traders

Melt-Up Continues While Metals Warn of Risks

Courtesy of Technical Traders

What a week for Metals and the markets, folks. The Transportation Index is up nearly 4% for the week.  The Dow Jones Industrial Average is up over 3% for the week.  Silver is up over 14% and reached a peak near $30 (over 23%).  Gold is up over 2.5% and trading above $2025 right now – with a peak price level near $2090.  If you were not paying attention this week, there were some really big moves taking place.

MELT-UP WITH HIGH RISKS – PAY ATTENTION

Overall, our research team believes the current “melt-up” price action is likely to continue as global investors continue to believe the US Fed will do everything possible to save the...



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Digital Currencies

Raoul Pal: "It May Not Be Worth Owning Any Asset Other Than Bitcoin"

Courtesy of ZeroHedge View original post here.

Authored by Turner Wright via CoinTelegraph.com,

Raoul Pal, CEO and founder of Real Vision, says Bitcoin may soon become his only asset for long-term investments.

image courtesy of CoinTelegraph ...



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Kimble Charting Solutions

Silver Headed Back To $50, Top Of The Cup & Handle Pattern?

Courtesy of Chris Kimble

Could Silver be creating a multi-decade bullish “Cup & Handle” pattern? Possible!

Did a retest of a handle breakout take place in March at (1), where Silver created one of the largest bullish reversals in decades? Possible!

Could Silver be creating a 40-year bullish pattern? Anything is possible! I humbly have to say share this; I’ve been in the business for 40-years and I haven’t seen anything like this.

Silver looks to have double topped back in 2011 at $50, which was the 1980 highs. After double topping, Silver ...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Sunday, 29 March 2020, 07:00:37 PM

Click for popup. Clear your browser cache if image is not showing.


Comment: Silver Shorts Are In a Bind | Ted Butler youtu.be/qQc0AoJp-Q8



Date Found: Monday, 30 March 2020, 05:21:45 PM

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Comment: 5 Questions From You for Luke Gromen youtu.be/nVZD_fuxbQE


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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Members' Corner

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

 

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

No matter the details of the plot, conspiracy theories follow common patterns of thought. Ranta Images/iStock/Getty Images Plus

Courtesy of John Cook, George Mason University; Sander van der Linden, University of Cambridge; Stephan Lewandowsky...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

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  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Promotions

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TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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