econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 09 April 2016

Negative Supply And Demand Factors For Bonds Are Just As Bad For Stocks

by Lee Adler, Wall Street Examiner

Last week the Treasury cut back the supply of the 4 week bills to $55 billion from $60 billion. Today they just announced another cut, to $45 billion. As a result of continuing massive demand for short government paper, the 4 week bill rate broke down from its range and closed at 18 basis points on Monday. The Fed's magic wand may finally be going limp.

Perhaps my long espoused belief that the Fed can't control rates will turn out to be correct after all. I was beginning to think that maybe they could pull it off because enough people were willing to play along with the illusion. But the jury may be starting to turn. As the BoJ and ECB continue to flood worldwide dealer/bank behemoths with cash, and NIRPitrage sends it cascading into the US, the Fed will be sorely tested to maintain the charade that it can control rates. It will be hard pressed to enforce the next "hike" if it even bothers to try. Certainly the weakening economic data (surprise, surprise - not) will give them an excuse not to.

At the long end, demand for Treasuries has been consistently declining. That did not matter much as Treasury supply was steadily falling from 2009 through 2015, but it will start to matter now. As Federal Revenues have fallen precipitously since the third quarter of 2015, the decline in new Treasury supply has ended. If the drop in revenues is not reversed quickly, Treasury supply will begin to trend upward. We don't need to be expert economists to know what declining demand and increasing supply will mean for bond prices and yields. We'll keep an eye on the charts for any sign of a yield breakout.

With indications growing that the world's central banks have gone completely insane, investors are increasingly recoiling from playing along with the con. Money is moving into short term government paper in ever increasing waves as traders, banks and financiers become increasingly risk adverse amid the growing evidence that central banks have lost control, as if they ever had any.

Neither bonds nor stocks are likely to fare well under these conditions. It's beginning to look as though all the trends are starting to move in the wrong direction.

This report shows and summarizes the trends in treasury market supply and demand as they are likely to impact the markets in the weeks and months ahead.

Treasury Pro Trader subscribers (or Professional Edition), click here to download complete report in pdf format.

Treasury Investor Monthly subscribers, click here to download complete report.


Subscribe to this report as part of the Treasury Supply and Demand Pro Trader Weekly or Treasury Supply and Demand Investor Monthly on a monthly or weekly basis.

Enter your email address in the form to receive email notification when Treasury Supply and Demand reports are posted. Select the reports for which you want to be notified from the list in the form.


>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical Opinion Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.





Econintersect Opinion


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
China, Russia, and the United States: Are They Superpowers?
A New Era of Central Banking?
News Blog
Real Paleo Diet: Early Hominids Ate Just About Everything
Amazon's Global Workforce Is Growing Rapidly
What We Read Today 23 February 2017
February 2017 Kansas City Fed Manufacturing At Highest Level Since June 2011
Lost In The Sixties-The Winds Of Change
January 2017 CFNAI Super Index Moving Average Statistically Unchanged
18 February 2017 Initial Unemployment Claims Rolling Average Insignificantly Improves
Jihadism: An Eerily Familiar Threat
Dynamic Stochastic General Equilibrium Forecast For February 2017
Infographic Of The Day: Guide To Tipping
Early Headlines: Asia Stocks Mostly Down, Oil Up, Dollar And Gold Steady, Extreme Arctic Warmth, Town Halls, More Water In Calif, UK Bogus Green Power, Mosul Airport Attacked And More
Documentary Of The Week: The History Of Humanity
Animals Know When They Are Being Treated Unfairly And They Don't Like It
Investing Blog
Investing.com Technical Summary 23 February 2016
Green Is Still A Go
Opinion Blog
Kenneth Arrow's Ignored Impossibility Theorem
The Blame Game
Precious Metals Blog
Deflation And Gold: A Contrarian View
Live Markets
23Feb2017 Market Close: Wall Street Closes Mixed Near The Unchanged Line, Nasdaq Closed Down Fractionally, The DOW Closes Up 35 Points, Crude And The US Dollar Remain Mostly Unchanged
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government





























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved