Bank Reserves - The Ghost Of Dead Loans Past, And War Gets Closer After Majdal Shams Massacre

If dollars died in loans gone bad, and the Fed were to resurrect those dollars by buying the bad loans and issuing "reserves" to banks, those reserves would be the poltergeists of the monetary system.

• War with Lebanon appears imminent after Hizballah's attack on Druze children, with Israel likely to respond soon.

• SOFR continues to wobble, has remained above baseline since July 2.

• Employment and consumer loans are leveling off post-lockdown, signaling a fake recovery, with insiders buying the least amount of their own stocks in the last 10 years.

• Reserves explained, using the analogy of monetary poltergeists.

I wrote this post yesterday but then lost the draft due to a faulty mouse that double clicks when I don't want it to, so I'm doing it again but in shorthand.

War With Lebanon Closer

I drove to Majdal Shams yesterday for the funerals of the 12 Druze kids that were murdered by Hizballah while playing soccer on Saturday. It's about 40 minutes north of me, right on the border. I spoke with a few of the Druze. They have awesome hats, the biggest mustaches you'll ever see, and very cool pants. And they are pissed off.

Israel has not responded yet but probably will soon, and we'll see what happens next. So far Hizballah is acting like toddlers. They are denying they launched the Iranian rocket (but they admit to all the others of course, just not the one that actually killed the Druze kids, THAT one was somebody else), and offering to withdraw to behind the Litani River if Israel doesn't respond. Meanwhile, in a further sign of state leaders losing their minds, Turkish Prime Minister Erdogan just threatened to invade Israel, so that's interesting I guess.

SOFR Continues to Wobble