TGA Causing Dip? (Patreon)

The Treasury’s account is like the government’s savings account at the Federal Reserve. When it gets low after a lot of spending, the Treasury sells bonds to get money from banks and investors to fill it back up. This takes cash out of the system because the money sits in the Treasury’s account and can’t be used by banks or investors. With less money around, borrowing gets more expensive, and it’s harder for people to invest.

This author from FT thinks it is what is impacting the market - not fear of Jackson Hole meeting on Friday or other macro shocks.

Less cash means less borrowing which means more cascading liquidations.

This is also tied to the RPP I mentioned at all time lows last week.

The biggest thing the Fed should fear is liquidity drying up.

Now on the other hand, Global M2 is still on the rise... but USA faces a cash crunch.

h.t Sanjay