A Shot Of Liquidity

No matter what the semantic arguments are (QE, not QE, reverse QT...), the hard reality is that $400B of encumbered assets were added to the Fed's books at par, and an equal amount of unencumbered money (liquidity) was released into the economy. This was not money-printing. This was not a gift. This was a swap of assets (like QE): paper assets for liquid assets. No argument that I have heard can deny that reality. Call it what you like, but it is a huge asset swap that releases these funds into the economy.

(Click on image to enlarge)

Our liquidity model captured the Fed's 'at-par' collateral-lending.

(Click on image to enlarge)

In addition to the Fed's liquidity-releasing swap, the Treasury's spending net-transferred +$75B to the private sector last week. The 20-day average transfer rate is +$9B/day.

(Click on image to enlarge)

Even with all the doom and gloom, the market is staying afloat…becasue it is all-about-the fund-flows!

More By This Author:

Liquidity Breakout And The Resart Of QE
Private Debt And Recession In 2023
Buy The Bad Profit News

How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.