However what if the government directly or indirectly buys a 70 or 80 billion in the futures market leveraged at 10x to support the market during the unwinding? Being an election year the Fed and government will do whatever is necessary to prop up the economy and market even if that means funneling copious amounts of money into equities and bonds for another year.
CMBS keeping hitting new records and not the good kind. I believe around 5.22 of all CMBS are delinquent.
When I got home today I was expecting to see the market up 1.5-2% due to the massive GDP increase but was surprised when I saw it ended down. Then I checked the dollar index and there was another massive move up in the dollar, getting close to 80. I thought to myself how funny it would be if we finally get these huge GDP numbers and everyone thinks were in a major recovery and the dollar carry trade unwinds throwing everything back into chaos.
Umm well some people might use that phrase in hopes that it would create liquidity, but they're misusing the term. Liquidity is when lots of trades are happening so the market is easily bought AND sold. So if the government just monetizes debt (prints money), liquidity might actually go down because investors worry about the result of inflation.
Since you have a new suit I feel like I should ask you a stupid question about economics that I should already know the answer to but don't. Does government monetization of the debt count as "pumping liquidity" into the market?