Market is in the process of adjusting to a slowdown in fiscal support, but nothing catastrophic. Nevertheless, stocks will head down for a while.

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China property developer Evergrande may provide a believable excuse for some to sell stocks, but the real reason the market is going down is tied to what I’ve been saying here over the past few weeks.

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Got lucky with a beautiful day. Gorgeous hike.

I explain the underlying dynamics causing the choppy market action of late.

Market rallied today as I expected due to reserve drain from corporate tax payments. But upside is capped for now.

Fed is falling behind on RRP activity, and reserves keep rising. Fed may pull the plug on asset purchases if the debt ceiling is not raised.

I’m sure everyone who was old enough remembers that terrible day no matter where you were. I was down there that day and can still remember it like it was yesterday.

Massive additions of reserves into the banking system is not benefiial. It doesn’t foster lending, and it’s not stimulus. It’s often the opposite.

Risk asset sales (stocks) may come due to ever-rising bank reserve balances. Fed behind the curve?

This should be an embarrassment for the Richond Fed. Loaded with strawman arguments, misrepresentations, false claims and deeply flawed dogma. Worst hit piece ever.

https://www.richmondfed.org/publications/research/economic_brief/2021/eb_21-12

https://mikenormaneconomics.blogspot.com/2021/09/absolutely-idiotic-hit-piece-on-mmt-by.html

Stocks follow economic conditions. GDP growth has slowed. Expect a correction.

Fiscal flows peaked in March at $984 bln for the month. They’ve been trending lower. This month, gov’t spending could fall below $600 bln. Will it be enough to keep the economy growing and stocks moving higher?

Broke my nose this morning when I went on my run.

Once again, ignorance about Social Security finances is being pushed hard. Social Security cannot go bankrupt. Watch Alan Greenspan school former Congressman Paul Ryan. https://youtu.be/DNCZHAQnfGU

Big miss on today’s ADP payroll number. This could portend a weaker than expected job number on Friday and market reaction.

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The daily flows data suddenly took a turn lower.

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Could see a significant slowdown in fiscal flows and that would be bearish for stocks.

Hard to talk about markets when our soldiers are dying.

Bond yields rose today but this is not likely the start of a sustained rise.

Jerome Powell is going to speak at the Jackson Hole symposium where he will talk about taper and the zombies will go nuts.

Nasdaq hits record. Other averages to follow. The flows drive everything and they’re still very strong.

Fiscal flows are too strong, at least right now. We should see new highs in the market soon.

Investor perception about monetary policy has been pushing the dollar higher, but the fundamentals that actually drive exchange rates are bearish for USD.

Actually, no. Fiscal support is the strongest since April. Buy the dip.

Afghanistan is injecting volatility and now add to this, fears of an economic slowdown. However, the big worry is the debt ceiling.

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Trillions wasted. Lives lost. What does it mean for the U.S. economy.

Record bank reserves are like gravity pulling bond yields down.

The "debt" is money. It’s already monetized.

Historic reserve additions to the banking system will eventually drive bond yields to zero or even negative.

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Predicted 22 years ago (too early) but we’re getting close and will hit it, and surpass it, soon.