Daily Treasury Statement Charts Update: 23/3/11

An update of the daily treasury statement charts:

 

Total Operating Balance Vs S&P 500 Inverted

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The total operating balance of the US Treasury fell by around $8 billion yesterday (latest). As I have said in previous updates; the overall trend of the total operating balance remains downwards (at least for another week or two) due to the unwinding of the supplementary financing account.

 

In a peculiar and alchemistic fashion, the markets have corroborated the thesis that net US Treasury withdrawals are bullish for risk assets and net accumulations are bearish for risk assets (on a lagged basis). The charts of the lagged total operating balance vs current risk assets are posted below. They continue to suggest that – in spite of the recent rally – market stress will be prevalent for the next 8-9 trading days. After that, there may be some upward movement.

 

Total Operating Balance Vs Dow Inverted (LAGGED)

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Total Operating Balance Vs S&P 500 Inverted (LAGGED)

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Total Operating Balance Vs Russell 2000 Inverted (LAGGED)

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Total Operating Balance Vs VIX (LAGGED)

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See here for our collection of rare historical economic data.

Posted Mar 23, 2011