Operating at the Intersection of Technology and the Capital Markets
Tag: fiscal policy
This week’s BTFP activity: The Bank Term Funding Program (BTFP, bail out/QE) had approximately $107.7 billion in outstanding loans as of Wednesday this week, up from $107.6 billion (+ $0.1 billion) a week ago. The “other credit extensions” line item of $81.9 billion includes the FDIC loans made to regional banks. This figure is down from $85.0 … Continue reading Weekly Update: Bank Term Funding Program
The 5-year Treasury yield is 4.62% and the 10-year Treasury yield is 4.56%. Yellen has flooded the market with new Treasury issues in order to replenish the TGA that she drew down from $1.7 Trillion in January 2021 to only $44 billion by June 2023. These new Treasury issues push yields higher. Once this forthcoming … Continue reading Treasury Yields Could Go Higher
Other than Tesla, none of the pure-play EV Auto OEMs are going to survive. Tesla is with us only through the courtesy of fiscal subsidies and monetary excess (ZIRP, QE, the Fed's Covid-related stimulus activities including its various credit facilities, ETF purchases and monetization of the CARES Act). Without that fiscal and monetary excess, the … Continue reading The Pure-Play EV Game Is Over
We believe it is likely that the Fed will lower its Fed Funds Rate faster than what it outlined in Wednesday's FOMC projections given that the interest expense scenarios on the Treasury Debt that we have outlined below are fiscally unsustainable. The average interest rate on Treasury Debt will climb higher if the Fed holds … Continue reading The Fed Will Likely Lower Rates Faster Than It Projected Wednesday
Yes, the GOP and Dems will get a deal done - Government shutdown / political theater notwithstanding - as both parties lack fiscal restraint. Treasury debt will continue to grow. Treasury debt sits at $32.96 Trillion as of September 13th and that number is going much, much higher! 2024 and 2025 and beyond will see … Continue reading Debt Mountain: Yes, A Fiscal Deal Will Get Done
Fed Chair Powell began his Quantitative Tightening (QT) campaign in May 2022. Meanwhile, Treasury Secretary Janet Yellen ran her own campaign - a counter campaign that offset the Fed's monetary tightening. Yellen stimulated the economy by pumping money from the Treasury's General Account (TGA) into the economy - more than offsetting the Fed's tightening efforts … Continue reading While Powell Tightened, Yellen Opened Her Purse
My sense is that 2024 will be an up year insofar as bankruptcies are concerned so long as interest rates remain elevated (the 10-year Treasury yield sits at 4.27%). Q4 2023 could very well see an acceleration in bankruptcies as COVID-era fiscal benefits peel away. One such example is the end of Joe Biden's student … Continue reading August Commercial Chapter 11 Filings Up 54% Year-Over-Year
I am in favor of increased transparency for private funds, especially as it pertains to the Private Equity industry and its highly suspect IRR calculations which inflate fund returns. As you would imagine, the Private Equity industry is lobbying this effort. My guess is that this ruling will get watered down as the Private Equity … Continue reading More Transparency for Private Funds
The price of oil has ranged from approximately $67 to $86 year-to-date with Friday as the high. What's to stop crude from breaking $100/barrel? A soft economy? Sure. A recession will break oil's back. However, what happens if the Russia vs. Ukraine/U.S. war continues for all of 2024 or escalates or both? How does the … Continue reading Is The Price of Oil About To Breakout?
We don't write frequently about U.S. Labor data because it is junk data. Most Government survey data is in fact garbage. I can't think of a Government data set that I believe is a quality data set. The Labor data that the BLS publishes lags. It is better to watch what companies are doing. From … Continue reading Unemployment Will Get Worse Before It Gets Better
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