Posts Tagged ‘Monetarism’

MORE MONEY MORE PROBLEMS

MORE MONEY MORE PROBLEMS

Close-up of stacks of Indian coins of different denominations

Courtesy of The Pragmatic Capitalist 

By Annaly Capital Management:

Headline CPI came out this morning and surprised to the downside, 2.6% year-over-year versus 2.8% expected.  Core CPI was also cooler than expected at 1.6% versus the 1.8% predicted by economists.  Watchers of the monetary aggregates aren’t as surprised, but who watches M2 anymore?  Every economic theory enjoys its time in the sun, but ideas fall in and out of popularity.  Monetarism is no different.  Money supply data used to be pored over upon its release by the Fed.  If it was 4:30 on a Thursday, you could be sure to find professional and amateur Fed-watchers alike holding their collective breath in anticipation of the new data.  Those days are long gone, as the Ms seemingly haven’t had the same predictive power (more on this and its deflationary portents next week).  We believe that the tracking and analysis of money supply will enjoy its day in the sun again, and in the meantime we plan to keep watch.

We’ve taken to following a measure of money supply that adds together M2 and the only surviving component of M3:  institutional money funds.  As you can see below, it has been falling since June of 2009 and is now down year-over-year.

Click Here to Enlarge Charts

Money supply spent all of 2009 in a deceleration pattern, a period in which we had actual CPI deflation, a rare event.  Since the peak in June of 2009, this measure of money supply has dropped $314 billion from a peak of nearly $11 trillion.  It’s in the harsh light of a falling money supply that we view the recent announcements from Fannie Mae and Freddie Mac that they will be purchasing delinquent loans from pools of loans that they guarantee.  These purchases will flow through to holders of agency MBS in the form of prepayments over a relatively brief period, to the tune of roughly $200 billion in cash.  This isn’t only an event for holders of these securities, it’s likely that it could be a money supply event as well, showing up in the aggregates.  It would be easy to look at $200 billion on a base of over $10 trillion as a drop in the bucket, but this would be a mistake.  It would eliminate most of the decline from the peak in money supply, and more importantly, it could be misinterpreted as an…
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Zero Hedge

The US Can't Afford To Let Shale Fail

Courtesy of ZeroHedge View original post here.

Authored by Robert Rapier via OilPrice.com,

It’s no secret that the growth of U.S. shale oil has been a thorn in the sides of both Saudi Arabia and Russia. They have seen their market shares erode as the shale boom made the U.S. the world’s largest producer of crude oil. But Saudi Arabia’s national oil company, Saudi Aramco, is a single entity that produces 13 percent of the world’s oil and controls 17 percent of the world’s proved reserves. That puts them in a very p...



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ValueWalk

Treasury Secretary Mnuchin on small business help plans

By Jacob Wolinsky. Originally published at ValueWalk.

CNBC transcript: Treasury Secretary Steven Mnuchin Speaks with CNBC’s “Squawk on the Street” today on small business help related to coronavirus

WHEN: Today, Wednesday, April 1, 2020

WHERE: CNBC’s “Squawk on the Street

Q4 2019 hedge fund letters, conferences and more

Full interview with Treasury Secretary Steven Mnuchin on small business help

JIM CRAMER: It’s our pleasure to bring in Steven Mnuchi...



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Kimble Charting Solutions

S&P Facing A Historical Kiss of Resistance?

Courtesy of Chris Kimble

Is the S&P starting out a new month and quarter at a very important price point? This chart would say YES!

This chart looks at the S&P 500 on a weekly basis over the past 12-years, reflecting that it has spent the majority of the past 9-years “inside of this rising channel and above its 200-week moving average!”

The weakness in March saw the S&P break below the bottom of the channel and its 200-week ma line for the first time in 9-years.

The small counter-trend rally last week has the S&...



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The Technical Traders

Weakness Appears To Be Setting For This Weeks Economic Data

Courtesy of Technical Traders

As the world reacts to the global economic slowdown because of the COVID-19 virus event and the massive stimulus programs and central bank efforts to support the global economy, investors still expect weakness in the US and foreign markets.  We believe this expected weakness will not subside until news of a proper resolution to this virus event is rooted in the minds of investors and global markets.

Hong Kong and China are currently concerned about experiencing a “third wave” of the COVID-19 virus within their society.  As the economies open back up to somewhat normal, people are very concerned that a renewed wave of new infections will suddenly appear and potenti...



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Phil's Favorites

Mr. Morgan

 

Mr. Morgan

Courtesy of 

The Federal Reserve had a precursor before it became the lender of last resort. It wasn’t an institution or a government department. It was a single, solitary man named J. Pierpont Morgan. Mr. Morgan, he was called in the newspapers, and you didn’t need to go any further – everyone knew to whom you were referring.

Stock market panics were common in the early 1900’s because of the agrarian nature of the economy. Each summer, the local banks that catered to farmers throughout the country began calling their money back from the banks in New York City and Chicago so they could raise enough capital to bring in the h...



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Insider Scoop

Why NanoVibronix's Stock Is Trading Higher Today

Courtesy of Benzinga

NanoVibronix (NASDAQ: NAOV) shares are trading higher on Wednesday.

The company announced it has received reimbursement approval from the U.S. Centers for Medicare & Medicaid Services for its PainShield.

NanoVibronix focuses on the manufacturing and sale of noninvasive biological response-activating devices that target biofilm prevention, wound healing, and pain therapy. Its principal products include UroShield, an ultrasound-based product to prevent bacterial colonization and biofilm in urinary catheters, enhance antibiotic efficacy,...



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Biotech/COVID-19

The new coronavirus emerged from the global wildlife trade - and may be devastating enough to end it

 

The new coronavirus emerged from the global wildlife trade – and may be devastating enough to end it

Government officers seize civets in a wildlife market in Guangzhou, China to prevent the spread of the SARS disease, Jan. 5, 2004. Dustin Shum/South China Morning Post via Getty Images

Courtesy of George Wittemyer, Colorado State University

COVID-19 is one of countless emerging infectious diseases that are zoonotic, meaning they originate in animals. ...



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Members' Corner

Tinker, Tailor, Mobster, Trump

 

Tinker, Tailor, Mobster, Trump

What happens when a Confidential Informant becomes President?

Courtesy of Greg Olear, at PREVAIL, author of Dirty Rubles: An Introduction to Trump/Russia

...



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Chart School

Big moving Averages and macro investment decisions

Courtesy of Read the Ticker

When price is falling every one wonders where demand will come in.


RTT black screen Tv videos study the simplest measure of price (simple moving average). What has happen before guides us now. 














Changes in the world is the source of all market moves, to catch and ride the change we believe a combination of Gann Angles, ...

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Digital Currencies

While coronavirus rages, bitcoin has made a leap towards the mainstream

 

While coronavirus rages, bitcoin has made a leap towards the mainstream

Get used to it. Anastasiia Bakai

Courtesy of Iwa Salami, University of East London

Anyone holding bitcoin would have watched the market with alarm in recent weeks. The virtual currency, whose price other cryptocurrencies like ethereum and litecoin largely follow, plummeted from more than US$10,000 (£8,206) in mid-February to briefly below US$4,000 on March 13. Despite recovering to the mid-US$6,000s at the time of writin...



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Lee's Free Thinking

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 ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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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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