re: Fed hides weekly M1 supply, says "money doesn't matter"

I mean Strannix nailed it. The fiscal arm is what caused the boom in aggregate demand. That has been shut off. Looks like there's still about another $1T in reserves that are trapped in the banking system according to Joseph Wang. 1) that's not really enough to move the needle on inflation unless it's allocated quickly like the CARES Act 2) Knowing 1 implies that there's nowhere to invest it. Which also means the banks will not suddenly pivot to lending which is how money is created in the U.S.

Edit: I said base money and no it doesn't. It's an asset swap between accounts at the federal reserve. It's up to the private sector to lend against their reserves and so far that's been shown to be limited to PPP/CARES Act frickery which has dried up.





Basel III is another issue to tack on.

Yardeni Research - Bond and Equity Capital Flows

Good data in that deck ^

You’re predicting a rate shock? Or just a reversion to the mean with equity valuations?

Retirement age is rough. I’d prefer real estate over any other asset class at this point in low tax/growing population areas and actually common stock in names that are going to buyback all of their float. Both have huge discrepancies in supply dynamics that should boost returns and outperform other asset classes.

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You’re predicting a rate shock? Or just a reversion to the mean with equity valuations?

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Combo with a housing crash

I think it’s pretty telling that 10 year treasuries are at a whopping 2.05% - the market continues to believe that long run inflation expectations will be muted or else that rate would be 4-5%+.

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The market often continues irrational or idiotic trends, theres piles of historical evidence. There is fricking massive inflation going on now. Fresh reports this morning at the wholesale level.

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Not really a ton of evidence in the bond market of such behavior.

Inflation is hot as hell at the moment - I don’t believe anyone is really suggesting otherwise. The discussion I’ve had in this thread has revolved around long-run expectations.

Even with the astronomical numbers we’ve seen in 2021/2022, the 10yr annualized CPI rate through January is 2.13%.

I’m not arguing against what we can see with our own eyes, I’m simply pointing out the doomsday projections over the longer run can still be pretty reasonable, even if it takes a year or two to wind it back in.

Housing isn’t crashing without a rapid fall in income which isn’t going to be allowed to happen. Inventory is at 30 year lows.

Please tell that to my grocery store!