Daily Treasury Statement Charts Update: 15/3/11
An update of the daily treasury statement charts:
Today was another very weak day for risk assets; the downward moves being initiated by bad news out of Japan. The total operating balance of the US Treasury rose yesterday (latest), increasing by $10 billion. However, with the unwinding of the supplementary financing account, it continues broadly lower.
As I have said previously: If markets are to remain this weak for a while, it is likely that the US Treasury will surprise itself by how much it ‘needs’ to withdraw from its coffers. This could bring the foxing ‘crack-up’ move that precedes a more profound downward leg. I now present the total operating balance with some risk assets lagged ~40 trading days; the charts suggest that the ‘crack-up’ move could begin in around 13-14 trading days:
[Again, although correlations may seem compelling, one should be wary of them. The following could be likened to alchemy.]
Recommended: Charting the Federal Reserve's Assets - 1915 to 2012