I got a great comment this week from reader Steve, on my post about why the appointment of new Fed Chair Jay Powell just doesn’t matter. Steve wrote:
Lee your commentary is always intended to be fact based and well informed. Thanks. It does appear at the moment that your shorting call based upon liquidity is too early. You originally discussed having a small short position and we have had the short-term LAMP red for weeks. Further, your commentary discussed huge financing requirements for the US Treasury based upon TBA advice. And – diminishing foreign demand for US treasuries. Therefore, where is commensurate the liquidity crunch and the pull back in stock prices.? So far, just seeing record high after record high. For now, it appears that the liquidity crunch is non-existent and at best temporary – if the markets significantly retrench, the Fed will again go back to Q/E. Look at the BoJ – they have expanded their bank balance sheet to 70% of GDP. The US can do the same. Grateful for your view. Thanks.
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The post Reader Steve Poses a Holiday Weekend Short-Selling Puzzler was originally published at The Wall Street Examiner. Follow the money!