Archive for the liquidity analysis Category

Something is about to break

Posted in liquidity analysis on 2011-11-06 by Strategesis


When Dexia was nationalized I said the clock was now ticking. Counterparty risk was the new threat to the global economy. When confidence is gone the system simply shuts down. What does that mean though? How do you measure confidence or lack thereof?

Simply look at where cash is going. Recently released data shows a record jump in the foreign reverse repurchase agreement balance held at the Federal Reserve (first reported by Zero Hedge on November 3).

In just one week a whopping $43.2 billion in liquidity was removed from the system and deposited at the Fed. That is a 53% jump in the total balance from $81.3 billion to $124.5 billion. The last time such a move happened was the week of September 24, 2008 when $44 billion was removed. At the height of the 2008 financial crisis the total balance held at the Fed reached $107.8 billion.



Crowds and Credit

Posted in education, fundamental analysis, liquidity analysis, price chart, socionomics on 2011-02-05 by Strategesis


Manias are fascinating to study in history, but are hard to accept if you are living through one. The most memorable ones in history require two elements, crowds and credit. While today’s global markets are littered with some of the most complex financial instruments in history, anyone studying the history of financial markets quickly recognizes that many of today’s tools for speculating on future price movements can be found as far back as the Amsterdam Exchange, founded in 1610. This exchange allowed speculators to take out margin loans, invest in shares of the East India Company, and purchase futures contracts on tulip bulbs. That’s right; tulip bulbs.


So You Thought Stocks Only Go Up In Boom Times?

Posted in fundamental analysis, liquidity analysis on 2011-01-01 by Strategesis

Martin Armstrong writes:

So you thought that stocks only go up in boom times? Sometimes the opposite takes place. Understanding CAPITAL FLOWS is the most important aspect of the economy, yet is the most overlooked and misunderstood trend in the financial history of man. … Capital revolves within a domestic economy, shifting from stocks, bonds, and real estate creating bubbles in one and then moves to the next. But there are times when that domestic flow is completely altered that can accelerate a given trend or reverse it entirely to the bewilderment of domestic investors. It is this latter combination that often causes the fundamental analysts to run around in circles. … Universities today merely regurgitate theories without observation. Politicians do not want to hear about INTERNATIONAL CAPITAL FLOWS for that implies they cannot do as they like if global capital presents a check and balance against of whims of politicians.

PDF of complete essay