Zeev's Turnips Patch-No Politics (ZEEV)

[federal reserves]

6 billion injection today by the FED.

So I WENT SHORT SnP? I must have been nuts!

And everyone was watching! Was I dumb? Maybe.

Tomorrow, $2 billion in 28 day repos, $4 billion in 8 day repos and $3.25 billion in 3 day repos expire. The FED needs to add $9.25 billion to keep the music going.

The Mortgage Re-financing indexes are reaching unreal levels, higher than 9/11, massive non-fed liquidity is entering the system as housing prices have spiked and interest rates are low, even as unemployment levels are rising and bankruptcies spike. The economy as measured by retail sales in AUGUST is NOW SHRINKING and industrial production is close to stagnation! What a divergence. Is all that housing refinancing going to power the economy, or is the last gasp for everyone to refinance
the huge surge of debt that can no longer be serviced?

And again, is inflation about ready to break out to new higher levels on the back of higher futures for grain and energy and will the FED in the face of this surge in mortgage liquidity now enter cut back mode? Today, the FED made statements that no rate decreases are needed to keep the economy going up while RSH(tech products) and WMT(china imports) reported declining SALES!

When the smoke clears, it becomes clear.