A burning question in these crazy times.
In the stock market, rising leverage fuels buying pressure; declining leverage fuels selling pressure.
The total focus on the Fed. And then the Fed steps away.
And as the Fed pumps out cash via QE on one side, it mops up $1 trillion in cash via reverse repos on the other.
Mass-forbearance is the best thing that ever happened to sweeping reality under the rug. But now, there’s a huge mess under the rug.
Even before QE, the 10-year yield lagged years behind CPI, up and down. And now, the Fed manipulates the market with QE.
First effect of MBS taper-talk from the Fed: Mortgage rates flat since late April even as long-term Treasury yields dropped.
How the “Wealth Effect” benefits Americans individually.
We don’t know how much total leverage there is, but from the trends in margin debt, we know it’s huge and ballooning.
Investors in subprime auto-loan Asset Backed Securities should be genuflecting in front of US taxpayers to thank them for the backdoor bailout.