Liquidity

The market is scary with predictions of gloom from paid former government officials. Any conspiracy theorist worth his salt would see this as market manipulation to create a buy opportunity for institutional and insider traders.


A look at the L2 or at least the easiest to access major part of liquidity, that is the Daily Treasury Statement, gives a clue. It is a simple fact, the more people, businesses and institutions pay in taxes the more they invest in equities. Tax revenue for 2015 was 2.7898 trillion as of 9/30, the end of government fiscal year -- as compared with 2.5997t for 2014, a mere 200 billion growth in tax revenue year over. The daily for 9/30/15, however, was 18.4 billion comparing favorably to 9.89 for 2014. The dailies tend to mean more in terms of short term market movement than monthlies or year to date, so take heart. The days of the week do not match up very well this year compared to last, however, so it will take a number of match ups to clearly see a trend.


We continue to flounder; politicians haven't a clue. They ignore the only things that will boost productivity and thus the economy: infrastructure, education, health, and closing the door to the outsourcing of labor, services and manufacturing. Utopia is dead; it has never worked. We must unleash our own factors of production before we can help others. We cannot expect to export our own brand of capitalism if our own economy does not work.


In the meantime whither the market. Look for buy backs of company stock and take a look at owner/ management buying activity. Look for market volume to increase and at institutional buying. Then pray.