Following Third Largest Weekly Surge In M2, Expect Artificial Spike In Leading Economic Indicators

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Wed, 07/20/2011 - 12:51 | 1474254 Cognitive Dissonance
Cognitive Dissonance's picture

Is that an EKG?

I that America's EKG? Doesn't look good from here.

Wed, 07/20/2011 - 12:55 | 1474269 spiral_eyes
spiral_eyes's picture

quantitative wheezing and chest pains.

Wed, 07/20/2011 - 13:01 | 1474294 Cognitive Dissonance
Cognitive Dissonance's picture


May I add to your masterpiece?

quantitative wheezing and chest debt pains.

Wed, 07/20/2011 - 13:54 | 1474442 CH1
CH1's picture

Or maybe "quantitative wheezing and death pains"?

Wed, 07/20/2011 - 13:10 | 1474307 fuu
fuu's picture

Gonna need some bigger paddles.


Thanks for the thread cleanup Tyler!

Wed, 07/20/2011 - 13:40 | 1474395 carbonmutant
carbonmutant's picture

 Looks like we may need to schedule some Executive Branch surgery...

Wed, 07/20/2011 - 12:58 | 1474284 jeff montanye
jeff montanye's picture

again thank you zh for the story behind the story.  and for the story that keeps on telling, by the first guy i heard say the two parties were substantially indistinguishable (doubted him then, don't now):

Wed, 07/20/2011 - 12:59 | 1474285 Oh regional Indian
Oh regional Indian's picture

Following up a JW in FL post is daunting.
I have no data to offer. But mostly because I think it's meaningless crap.

Need pump, run printer. Simple. I can envision a cartoonish ending with wheels flying off printers and smoke rising from the mint as exhausted money-printers work overtime to keep the heli-chop-ters loaded.


Wed, 07/20/2011 - 13:11 | 1474316 Oh regional Indian
Oh regional Indian's picture

Hmmmmmm, I guess JW went too data far it seems.


Wed, 07/20/2011 - 13:35 | 1474297 hambone
hambone's picture

Expect stocks to surge once the next LEI reading is announced as a result.

Uhhhhh, I thought we learned the 2nd rule of post March 2009 fight club was to expect stocks to surge forever and always based on anything / nothing / something???  Is something changed here?  Or are you suggesting stocks will surge 100% again (go Minsky)?  Are you suggesting that this surge will be more artificial than the previous surges or simply more vertical trajectory???

If I understand you this is the equivelant of replacing one set of silicone breast implants with an even bigger set while the MSM all sit and discuss if they are real and/or will they continue to grow indefinitely???

Wed, 07/20/2011 - 13:07 | 1474302 GiantWang
GiantWang's picture

Does anyone really still put stock in LEI?  I seriously don't know, so I'm asking.  The greatest service/skill anyone could ever acquire is the ability to discern good information from bad.  In the absensce of the ability to do that, I believe average investors disregard all information, in much the same way that commercial advertising is often "tuned out" in favor of word-of-mouth recommendations.

I do, however, click on every single Ally Bank ad served to me by adsense, just to increase their marketing expenses!

Wed, 07/20/2011 - 13:48 | 1474420 Smiddywesson
Smiddywesson's picture

The greatest service/skill anyone could ever acquire is the ability to discern good information from bad.

If you are trading this market based on what you consider good information, good luck to you.  This market responds to the manipulation that has kept it afloat.  Understanding that scam is the only thing that will work.  In this environment, faith in good information will destroy your account.

Wed, 07/20/2011 - 14:06 | 1474478 GiantWang
GiantWang's picture

We are on the same page.  I was saying that if good information does exist, it doesn't matter to the masses.  If there is a universal truth with a logical and unavoidable conclusion, I would put faith in that as "good information," but other than eventual collapse of the ponzi scheme (which is almost impossible to time), does such information exist?

Wed, 07/20/2011 - 13:14 | 1474319 Eric Cartman
Eric Cartman's picture

What time is this data release? 8:30a or 10am? 

Wed, 07/20/2011 - 13:25 | 1474347 Bear
Bear's picture

Released on 7/21/2011 10:00:00 AM

Wed, 07/20/2011 - 14:10 | 1474497 Eric Cartman
Eric Cartman's picture

Thank you sir!

Wed, 07/20/2011 - 13:20 | 1474335 YesWeKahn
YesWeKahn's picture

Tyler, when this will be annonced?

Wed, 07/20/2011 - 13:21 | 1474338 RacerX
RacerX's picture

"Kool-Aid" sugar spike.

Just wait'll the crash..

Wed, 07/20/2011 - 13:23 | 1474340 mayhem_korner
mayhem_korner's picture

The proclamation of wellness is a greater sickness than the sickness that lies beneath.

Wed, 07/20/2011 - 13:25 | 1474348 Larry Darrell
Larry Darrell's picture


Would it be safe to say immediately after this release we should get the ES - RISK divergence free money arb?


Wed, 07/20/2011 - 14:56 | 1474625 HowardBeale
HowardBeale's picture

Since it is a recurring...occurence, are there any of you that are playing it both ways? That is to say, play the divergence, then reverse and play the convergence.

Wed, 07/20/2011 - 22:32 | 1475966 Larry Darrell
Larry Darrell's picture

Not playing the divergence.  Although it does seem like it always diverges 1 way  ES too high compared to RISK basket, if you set up a divergence trade and for some unknown reason it goes the other way ES below the RISK basket, you end up losing it all fairly quickly.

PIGS get slaughtered.  Don't get greedy.  Take the easy free money when it shows up.

And Tyler never fails to point it out.

Wed, 07/20/2011 - 13:35 | 1474380 Fourth Horseman...
Fourth Horseman of the Apocalypse's picture

A reason for the rise in M2 is the debt ceiling limit.  Since late May, the US Treasury has reduced its issuance of Treasury Bills.  This has reeked havoc in the repo market and it has forced short-term investors like corporate CFOs into the bank deposit market.  

Wed, 07/20/2011 - 13:44 | 1474408 Catullus
Catullus's picture

This is an indication that the excess reserves in the system are beginning to hit the real money supply. The Austrians economists have been pointing at this for a few weeks now. Look at Robert Wenzel from The effects of QE2 haven't ended yet. The immediate impact was a bond swap event with the primary dealers. That was really more about prevent a liquidation event in late 2010. Inflation is about to pick up significantly over the next several months.

Wed, 07/20/2011 - 14:12 | 1474504 Eric Cartman
Eric Cartman's picture

I'm just gonna buy some ES at 9:55, hold it for 10 minutes and sell. Then go play my xbox.

Wed, 07/20/2011 - 15:24 | 1474781 flyr1710
flyr1710's picture

june leading indicators reported in august - need i say more

Wed, 07/20/2011 - 15:27 | 1474796 Eric Cartman
Wed, 07/20/2011 - 15:39 | 1474850 Problem Is
Problem Is's picture

Nice analysis and post Tyler... Way to expose that systemic corruption on which Wall Street & DC fraud are based...

Chairsatan and Obama Bin Lyin' are pulling out all the bullshit stops...

Wed, 07/20/2011 - 18:23 | 1475431 flow5
flow5's picture

Reg Q removal backfired?  Confusing to me because DDs have 10% reserve requirement whereas MMDAs don't.  But then confirmation is that required reserves just exploded.

Wed, 07/20/2011 - 18:52 | 1475497 platoslast
platoslast's picture

wondering what the fees associated with this latest transaction were...the banker bitchez know its coming to an end and they are grabbing everything they can

Thu, 07/21/2011 - 07:22 | 1476397 flow5
flow5's picture

"has to do with the repeal of Regulation Q (explained here) which has resulted in a surge in small tie deposits"


If the effective date of the repeal is July 21, 2011, how can any substantive deposit shifts already be in place?

Thu, 07/21/2011 - 08:36 | 1476521 hardcleareye
hardcleareye's picture

Against this backdrop what we may be seeing is an unwinding of sweep arrangements prior to the July 21 repeal of Reg Q.

The change is taking place in the middle of July, folks are changing banking arrangments at the beginning of the month...

Thu, 07/21/2011 - 10:13 | 1476936 Eric Cartman
Eric Cartman's picture


Stone McCarthy could NOT have been more wrong with this study!!!!! WOW. I'm glad I listened but it was a joke. It was a horseshit victory, it was a horseshit win. 


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