So said the Mamas and Papas back in the 60s. We can still hear the echoes of their lament on the highways to work, in the coffee drive-throughs, and back seats of car pools (some people still do this).
Papers scattered over desks, it's time to get down to business, earn the paycheck, do whatever it is you do to keep yourself afloat.
Monday mornings are a grind, unless, that is, you happen to be a big bank, a global systemically important bank, otherwise known around financial circles as a G-SIB. Then, Monday is just another day to goose your bottom line. And this Monday was a good one.
Thanks to algo-spiking headlines suggesting - for about the 20th time in the past six months - that a China-US trade deal was on the way to becoming reality, stocks roared out of the gate at the opening bell, sending the Dow, S&P, and NASDAQ to all-time closing highs. All-time highs are all well and good, mind you, except when they're built on the back of a drama that never ends, like the ongoing US-China trade deal.
Since the US and China have been engaged in this delicate dance markets have soared every time a possible breakthrough is mentioned and fallen whenever snags are discovered. It's what happens when computers run markets instead of people, even though the computer algorithms were programmed, supposedly, by humans (ahem).
More interesting, however, is the lack of news surrounding the ongoing implosion in repo markets that began in late September and continued through October, now extending into November. It's a real crisis, but now it appears that all of this was triggered by the good people at JP Morgan, yes, that G-SIB bank at the top of the list in the up-article link.
According to the usual somewhat reliable folks at Zero Hedge, JPM was going about its work to keep the economy humming along by selling loans and buying long-dated bonds, according to rules laid out by none other than the Federal Reserve.
How tidy, for Morgan and CEO, Jamie Dimon, to have the incredible good fortune to be able to make more money selling loans than making them (not making this up; it's what happens when interest rates are too low). But, because of JPM's massive portfolio, it cause a not-insignificant disruption in the overnight lending market (repo), that prompted the Fed - hearing the wailing of cash-poor clients - to offer up some emergency TOMO (Temporary Open Market Operations) overnight auctions and eventually cede to POMO (Permanent) and "not QE," to quiet the troubled sector at the heart of the global economy.
So far, it seems to be working, though the general public doesn't even notice, probably because of the fabulous Dodd-Frank legislation that allows the Fed to do essentially bailouts on an ongoing basis without having to go to congress, as was the case in 2008 with TARP.
Jimmy Dore, with help from Dylan Ratigan explain in the 12-minute video below (worth the watch):
John Pepin chines in with pithy commentary from his incapp.org blog:
If the demand for debt exceeds the banks ability to loan then one of several things must happen. Either the interest rate rises, (and we all know that is unacceptable), or the banks have to take hidden loans from the federal Reserve to cover that demand for debt.
Monday, Monday, can't trust that day. Worry not, the week is just getting started.
At the Close, Monday, November 4, 2019:
Dow Jones Industrial Average: 27,462.11, +114.75 (+0.42%)
NASDAQ: 8,433.20, +46.80 (+0.56%)
S&P 500: 3,078.27, +11.36 (+0.37%)
NYSE Composite: 13,355.44, +55.14 (+0.41%)
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