A good friend of mine, former financial advisor, is back to trading after spending the past decade as a chef in NYC. The last strong look at the market for him was 2008-2009, when he and I gamed the financial crisis and made some coin. He’s texting me these days about the Fed and how the repo markets are a sign of doom. But I rebut him and try to remind him that the reason why the financial criss happened was due to lack of intervention. It was only after the Fed intervened did markets bottom. Yes?
So here is the Fed’s balance sheet, an obvious QE in the making with rapid expansion.
In case you missed it: #Fed balance sheet expansion continues as Fed keeps buying more US debt. Total assets rose by another $19.6bn to $4,039.4bn, equal to 18.8% of US's GDP. pic.twitter.com/8PmAPjqYxx
— Holger Zschaepitz (@Schuldensuehner) November 9, 2019
You only have to ask yourself a few questions when looking at that graph.
Can they keep it up?
Will they keep it up?
Is intervention bullish or bearish?
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