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Lee Adler

Lee Adler

Editor and publisher of the Wall Street Examiner- and The Wall Street Examiner Professional Edition, a proprietary service for professional investors and sophisticated individual investors.

Articles by Lee Adler

Treasury Bill Interest Rates Stay Sticky Near the Highs

April 11, 2019

Short term Treasury Bill interest rates have remained near their highs. That’s despite the Fed announcing a less tight monetary policy, and despite a big reduction in Treasury supply.
These are real, actively traded markets, so direct manipulation of phony rates like the Fed Funds rate are less of an issue here. We can see the reality of the stickyness of high rates, that are likely to go even higher in a few months.
Note: This report is an excerpt from Here’s How Light Treasury Supply In April and May Create Selling Opportunities in Bonds and Stocks. Get 15% off if you subscribe today.   
T-bill rates have been rangebound near the highs since December. The market hasn’t budged despite the

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Interest Rates and Wage Inflation

July 21, 2017

The monthly release of the BLS jobs data includes the latest data on wage inflation. I thought this would be a good excuse to review the conventional mainstream economic "wisdom" on the relationship between interest rates and inflation, in this case, wage inflatio

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Yes, We Have No Inflation, Not Quite

July 19, 2017

"U.S. Consumer Prices Unchanged in June!" trumpeted the Wall Street Journal, with similar headlines coming from the rest of the media. Yes, we have no inflation! That’s the mantra we keep hearing, and it was reinforced by the CPI release for June. Whenever I see these headlines it reminds me of the old Ragtime song, Yes, We Have No Bananas, sung by Al Jolson. We got everything else, but we have no inflation today.

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Burden of Proof Now Shifts to Bond Bulls

July 18, 2017

Treasury auction demand has been stable since the last debt ceiling crisis in 2015. Coupled with gradually falling supply, that has kept Treasury yields locked in a tight range. Don’t be fooled by all the media talk about the rise in yields since last month. Yields are still range bound.

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Real Business Investment Is Bad News For Stocks

July 17, 2017

Earlier this month the Census Bureau reported Private Construction Spending for May. It’s an important report primarily on the commercial side because it gives us a look into the all important commercial development sector. Aggregate that with Core Capital Goods Orders, and we get a great picture of the state of business investment and business confidence.

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Time Bomb Ticks As US Continues to Issue New Debt Despite Debt Ceiling

July 14, 2017

The Federal Government has continued to issue new debt despite the debt ceiling. It has done so by using its big pile of cash to pay down the debt it owes to Social Security and to government and military pension fund beneficiaries. That internal debt is included in the debt subject to limit. By paying down the internal debt, the government makes room to add to its public debt. It thus maintains a regular schedule of new issuance.

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Here’s Why Strong Durable Goods Numbers Are Bearish Omens

July 12, 2017

U.S. Durable Goods Orders Fell 1.1% in May, screamed the Wall Street Journal headlines late last month. The Journal excused the "bad" news by attributing it to the volatile aircraft sector. "Demand for long-lasting factory goods declined in May for the second straight month, driven by a pullback in airplane orders as the U.S. manufacturing sector continues to find its footing."

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When It Shows Up in Economic Releases, This Data Will Push Fed to Tighten Fast

July 10, 2017

The other day I showed you data on Federal Withholding Tax collections that suggested that the US economy is beginning to overheat. Data on other tax collections in June from the US Daily Treasury Statement also is leaning that way. It takes a month or two for the economic data to catch up with the reality of what is happening in real time.

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New Home Sales Rise in Final Stage of Housing Bubble Two

July 7, 2017

The Wall Street Journal got pretty excited about the Commerce Department’s report on new home sales late last month. As it turns out, there was some method to their madness. Sales rose a bit, and price inflation raged in May. But don’t get too bullish, housing fans…

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As Tax Collections Boom, Panic Now and Avoid The Rush

July 6, 2017

Apparently, lots of people think that Don Trump is making America great again. There’s a boom afoot. The Federal tax collection data for June tells us that animal spirits have returned. Data from the US Treasury’s Daily Treasury Statement showed that taxes zoomed higher virtually across the board in the final two thirds of the month, after a weak start.

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Home Sales Contracts Set Alarm Bells Ringing

June 29, 2017

Yesterday we reviewed the data on what the National Association of Realtors (NAR) calls "Existing Home Sales" (EHS) as if that number is a current event and an important data point. In fact EHS reports the number of previous sales contracts on existing homes that went to closing in May. Sales that closed in May typically took place in March and April. Sales normally take place from 4 to 12 weeks before the closing. Around 90% +/- of all sales close. The closing is a formality. Why wait for 3 month old data when we have the data for last month.

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Existing Home Sales Grows a Frothy Head

June 28, 2017

Last week the NAR reported the number of closings of previously sold homes. They call the report "Existing Home Sales." It is true that they are existing homes, but the count does not show the number of sales. It shows those that have closed or settled. The sale happens when the contract is signed. That’s when theirs a meeting of the minds between buyer and seller, and when the price is established. All parties to the deal agree that the property is sold, including the Realtor who puts up a SOLD sign on the property. Buyers in the market, consider the property sold.

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Macro Liquidity Time Bomb Ticks Toward Zero

June 27, 2017

US macro liquidity has grown slowly over the past year. Meanwhile, stock price inflation has surged, setting up a large divergence versus liquidity. It suggests that the market has become overextended due to excessive bullish sentiment. This is the mirror image of the oversold reading in February 2016.

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Retail Sales Weren’t Bad- Here’s Why You Should Beware of Good News

June 21, 2017

The mainstream media dutifully reported the Census Bureau’s May retail sales release last week. "Boo hoo," they cried, "Sales fell 0.3% in May!" This, when everybody (economists’ consensus view) expected a 0.1% gain. Of course, these are nominal figures, so even a 0.1% gain would have been terrible, with CPI averaging nearly +0.2% per month.

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Calm Before The Storm- Part 2, The Banks

June 20, 2017

Yesterday we looked at the idea that the Fed’s balance sheet (BS) is in the calm before the storm. I briefly touched on the fact that banking indicators are in a similar place. Not much is happening right now, but the storm is just over the horizon.

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Fed Balance Sheet in Calm Before the Storm

June 19, 2017

The Fed’s announcement that it will soon begin to shrink its balance sheet is the most important step that it has taken with monetary policy since it first started outright purchases of Treasuries from Primary Dealers in March 2009.

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Another Bogus “Inflation” Report

June 16, 2017

When the financial media and the economic priesthood talk about inflation, they’re really not talking about inflation. As classically defined, inflation is "a rise in the general price level." Official "inflation" measures actually count only a limited, arbitrarily defined, and constantly changing combination of consumer goods and services, that end up grossly understating the inflation rate.

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Fed Announce Boa Constrictor Policy

June 15, 2017

Today, the moment I have been warning about finally arrived. The Fed announced that it would begin “normalizing” its balance sheet, probably later this year. Back on April 18, I wrote…

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Debt Ceiling? No Problem- Treasury Keeps on Issuing

June 14, 2017

Yesterday we looked at how the Treasury is playing games with its bookkeeping so that it can continue to raise new public debt while having been at the legal debt limit since March 16. Now here’s a look at what’s coming in terms of new bond supply, and what that means for the markets as we look ahead.

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Treasury Hunger Games

June 13, 2017

For several months I have been warning that the debt ceiling would cause the issuance of net new Treasury supply to cease, and that could cause a meltup in the markets. That’s what happened in the last debt ceiling impasse in 2015, and that’s what common sense tells us should happen if the Federal Government cannot, by law, increase its total debt.

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The Bank of the People Was The Tip of the Iceberg – Who’s Next?

June 12, 2017

Every month I trot out a list of charts of bank deposits in Europe’s bigger dead sister banking systems, Italy, Spain, Portugal, Ireland, and Greece. I wasn’t going to recount them here this month because there was really nothing new to report. They were all still either declining or lying there dead in the water in April, just like every month before.

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In Europe The Question is Where’s The Growth? It’s Not In The Bank

June 9, 2017

Earlier this month I reported on how the much ballyhooed European economic recovery wasn’t showing up in the bank asset data. Virtually all of the growth in bank assets, such as there was, was a result of the direct transfer of cash from the ECB via its recent massive loan operation called the TLTRO. That means Targeted Long Term Lending Operation.

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Deeper Dive into Excise and Other Tax Data Not Reassuring

June 7, 2017

In our last look at taxes we saw the Federal excise taxes don’t support the idea of a growing economy. One of the largest components of Excise Taxes is the Highway Trust Fund tax on gasoline. That data is only provided in the Monthly Treasury Statement which comes out on the 8th business day of the following month. The report for May is due on June 12.

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Federal Tax Collection Data Shows US Economy Persistently Weaker

June 6, 2017

Real time daily Federal tax collection data compiled from the Daily Treasury Statement, and slightly delayed data from the Monthly Treasury Statement, are probably the best indicators of the US economy. They’re actual, total monies taken in by the Internal Revenue Service for a variety of taxes. They are real time or near real time. They are not based on surveys. The data isn’t seasonally, or otherwise statistically manipulated. This data invariably correctly tells us where the US economy currently is, and how it is trending.

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