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Barton

17 May, 12 tweets, 4 min read

70% chance that we are going to see another wave of COVID in parts of US in mid June through late July.

1. we are importing the Indian variant at full speed.
5 direct flights a day are still operating (4x UAL: DEL-EWR/SFO/ORD and BOM-EWR; 1x AIC: DEL-EWR)

The "travel ban" only applies to non-US residents.

Even newly admitted Indian students seem to be waived from the ban:

timesofindia.indiatimes.com/world/us/quali…

2. Infection rate of COVID is currently sky high in India: 50% of Australians on the Australia repatriation flight from India last Friday were denied boarding, because of +ve COVID tests or acute exposure.

reuters.com/world/asia-pac…

3. The Indian variant B.1.617.2 is so contagious that it is displacing the UK variant in UK right now.
bbc.com/news/health-57…

now with the mask mandate lifted in the US, perfunctory quarantine enforcement, and the summer travel season starting, this is likely to be a perfect storm for antivaxxers to get hit by the Indian variant.

What can one say?

Bless your heart...

p.s. I am not worried about people who are vaccinated.

Advice for vaccinated people who are planning to engage in high risk activities in the next 4-6 weeks without a mask:

Probably a good idea to get an spike protein IgG test to verify that you do have the antibody

I have two first-degree contacts who failed to develop antibody...

..weeks after their 2nd jab. Both cases were outside of the US. But there is always a small chance that the vaccine may be stored improperly and lose its potency. You never know.

Get tested, so that you won't take unnecessary risk.

Some more concrete data behind this: CDC forecasting B.1.617.2 (indian variant) growing from 0.5% of the new infection to 3.3% of the new infection in 1 week.

Keep an eye on the data release from CDC this Friday. We will see how much growth of B.1.617.2 is realized.
covid.cdc.gov/covid-data-tra…

To be clear, I am not projecting another round of lock-down here.

probably "just" a lot of suffering for unvaxxed people (including those who had COVID before).

somehow SARS-COV2 is safer than the vaccines to them.

CDC is too slow in compiling their data, IMO. The 2-3-week lag is too SLOW.

someone please sends some NYFed H.4.1 people or Treasury people to run CDC's variant monitoring program.

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More from @Barton_options

Barton

@Barton_options

12 May

Hey Twitter, I am back, and SICO seems to be back too!

Analysis and projection here: fed.tips/outlook2021051…

I had to take more days off per doctor's orders last weekend. :( But largely recovered now.

There are a ton to write about with all the new data.

so expect daily notes (a blend of premium and free articles) on fed.tips in the next couple of weeks.

The point of this chart is that we are in a $460Bn-forced-feeding period (ending tomorrow), which is finally causing "indigestion" problems and forced deleveraging (it seems).

Read 4 tweets

Barton

@Barton_options

7 May

Details emerged from Treasury's refunding meeting this week has been quite surprising and inconsistent. The implication for stonks for the next 4-5 months could be surprising as well.

Treasury declared its TGA target for July 31st at $450Bn, while slowing down T-bill reduction.

Plugging in the current USG spending model along with EOQ TGA target of $800Bn, I ended up with this:

Not much spending until July when TGA nose-dives from $950Bn to $450Bn in 4 weeks.

A few things have happened in the past 2 weeks.
1. Tax receipts have been very strong (the economy is almost overheating from payroll data)
2. Stimulus spending has dropped to almost nothing.
3. Treasury's TGA reduction plan will have to change course in July as a result

Read 5 tweets

Barton

@Barton_options

22 Apr

Saw this chart making rounds on Twitter.

The biggest flaw here is that if one follows the conservative approach evident in claiming all experimental antivirals are ineffective, tylenol (paracetamol) would be equally counter-productive, since it depletes glutathione

Glutathione is need in lung for uninfected cells to survive oxidative stress induced by hyperactive immune response, and for sputum clearance

NAC is essential for glutathione synthesis.

Recently a surgical technician died of suspected tylenol overdose after taking the 2nd dose of covid vaccines.

The risk of an acute covid patient overdosing on tylenol should not be neglected

Read 5 tweets

Barton

@Barton_options

20 Apr

Overnight Reverse Repo at NY Fed is taking off.

Ignoring the window-dressing spike on 3/31, this sustained increase signals that the offloading of bank reserves from big banks to government money market funds has finally started.

This is a short-term relief valve for their balance sheet pressure.

Last time this happened, QE stopped 10 months after (Oct 2014)

This time, Fed may need to continue on at least with some twisting (buying 10Y-30Y bonds, while selling Tbills) for yield control purposes, as net interest expense would skyrocket otherwise.

Pressure on bank's balance sheet is likely to continue on at least into 2022.

Read 4 tweets

Barton

@Barton_options

16 Apr

The weekly liquidity outlook has just been sent!

No change in my positions/outlook.

The interesting part is a longer-range forecast, 6 weeks all the way into the end of May. something on the horizon that you should know about.

fed.tips/outlook2021041…

Also discussed is the latest bank B/S outlook including data from MS this morning.

It's a very long update for a slow week, and thus the delay.

Now that I am back in town with a lot more data, time to finish up the SICO series and review what happened in Feb/March. Stay tuned for many articles to be released this weekend on fed.tips.

Read 4 tweets

Barton

@Barton_options

15 Apr

Done catching up on the data after the trip. Some data dump tonight and tomorrow.

First up, from the Q1 earning data of US GSIBs, they are running closer to SLR limit than they admit, but they are still room in their balance sheet. So they will extend cheap leverage for fees.

And freak out later (2H of Q2)..

GS for example will prefer debt underwriting (leveraged finance) with a 60+% ROE to reserves with 2% ROE at best (20x 10bps IOR).

But we are at the beginning of a new quarter, so they will make money first (extending leverage), and worry about the balance sheet later.

Read 4 tweets

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