Hegedus Aerodynamics @HegedusAero Twitter profile

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Hegedus Aerodynamics

1 month

One of the jobs of an Aero/Astro engineer is to do failure analysis. Failure is when crazy amounts of time and 💰 🔥. 😆 people here should not be surprised that I have sharp elbows, am blunt, and pushback.

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring @DanielSimonyi Plot for all nonfeeder MMFs. Orange=total securities. Blue=RRP of one flavor or another. Purple=US Treasuries. Magenta=US Gov Agency. MMFs like RRPs. Federal Reserve not the only game in town in regards to RRP, but certainly biggest at moment.

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Hegedus Aerodynamics

@HegedusAero

1 year

Apparently, there are hot girls waiting for me who like my posts. Never realized so many are into economics and/or investing.

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Hegedus Aerodynamics

@HegedusAero

11 months

The Treasury Auction Allotment Data for Nov. came out yesterday. 1st plot shows the number of T-Bills "owned" by each category if no bills were bought or sold on the secondary market. Investment Funds are buying the new net issuance.

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Hegedus Aerodynamics

@HegedusAero

1 year

(Fixed Investment - Consumption of Fixed Capital) + debt increase -> someone's net income (i.e. profit or savings). If the federal government cuts back on its deficit spending in a significant way, even ignoring a default, there will be a recession.

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring @Chunweichan Is that another way of saying E/P vs. 10 yr?

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Hegedus Aerodynamics

@HegedusAero

11 months

CPI came out, and what I like to compare is the annualuzed 6 month % increase of SA Services Less Energy Service (orange) and weighted average of Hourly Wage of Production and Nonsupervisory Employees (blue). Market says this will come down, but, IMO, it does not look that way.

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring The backstory behind the QRA statement was that GAO asked the Treasury to clarify their position. So, I believe the Treasury will stick to it.

Federal Debt Management: Treasury Quickly Financed Historic Government Response to the Pandemic and...

The federal response to COVID-19 led to unprecedented spending. Treasury quickly sold securities to raise $3.8 trillion. Meanwhile, Treasury increased...

www.gao.gov

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Hegedus Aerodynamics

@HegedusAero

10 months

@JimJame74888138 @dampedspring Honestly, as an investor, Fintwit has a good and bad side. @pinebrookcap , @Econ_Parker , @Johncomiskey77 , and @M_C_Klein have been great. Yet, my ideas have been called silly (and shown wrong) and I've been called me an "argumentative bitch" Retail investors, tread carefully.

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Hegedus Aerodynamics

@HegedusAero

10 months

Truthfully, I, a simple person, do not understand the Fed's dot plot. NSA Insured Unemployment Rate neglecting CA and NY. Orange=2018, yellow=2019, and blue=2023. 2023 is lower than the two other years. And CA and NY, not shown, are doing OK compared to earlier in year.

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Hegedus Aerodynamics

@HegedusAero

1 year

And to be clear to everyone, I'm an amateur at this and don't mind being in a "deep rabbit hole you are trapped in."

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Hegedus Aerodynamics

@HegedusAero

1 year

@WallSt_SunTzu @dampedspring @DanielSimonyi SEC MFP files.

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring @wbmosler I'm not smart, but I'll give my two cents. If the gov pays a fixed income investor interest, then that investor might just turn around and lend gov back that interest to cover what they just got. To Infinity and Beyond!

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring Maybe a poor choice of memes, given what's going on...

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Hegedus Aerodynamics

@HegedusAero

1 year

Page 6.

Andy Constan

@dampedspring

1 year

@HegedusAero I am trying to engage with you but have no idea what you are talking about? You came up with a bizarre scenario and I've wasted far to much time this evening trying to help you out of the deep rabbit hole you are trapped in. Good night sir.

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring Not sure if your post, in part, pertains to me, but it is fun trying to figure out why things work. Guessing where things are going is fun to see if one is right or not. Being wrong is fun in an intellectual way. Learning. And your investing is tied to your analysis.

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring A plot of SP500 (p/e)*(interest rate)*100. Orange=3 month bill rate. Blue=10 yr rate. Market mindset/focus might be around 10 yr rate, compared to 2006 period.

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Hegedus Aerodynamics

@HegedusAero

1 year

@Whatsmydiet @sidprabhu @BickerinBrattle @elasticretreat As a general statement, (i.e. not directed at anyone specifically), I agree that understanding one's counterparties helps the bottom line. With investing, I want to own what other people will want, not what I want. 😀

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring I'm surprised the stock market is so calm. The likelihood that the gov defaults is very low, but, IMO, the likelihood that there is a recession due to budget fight/cutbacks is significant.

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Hegedus Aerodynamics

@HegedusAero

1 year

@BobEUnlimited @BickerinBrattle Oh, and, if the topic of Federal Reserve profit/loss being included in BEA corporate profit comes up, feel free to remind him I was the one who told him that. It seems I did do some reading/homework that others did not. 😀

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Hegedus Aerodynamics

@HegedusAero

1 year

@BobEUnlimited Earning estimates, and earnings, will come down and markets will not care because it's full employment and a party. Granted there will be small blips as those who do care rotate out of market. But, there will be someone in the wings waiting to take their position in this dance.

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Hegedus Aerodynamics

@HegedusAero

1 year

@INArteCarloDoss Why would interest payments not be stimulative? It feeds directly into corporate and consumer earnings. Stocks are happy. Spending is happy. Party.

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Hegedus Aerodynamics

@HegedusAero

1 year

@BobEUnlimited @NielSagaert @T3_RM @dampedspring BEA corporate profit minus Federal Reserve profit nondimensionalized by GDP. So what will pull this number down, going forward? Sure, consumers might slow down spending vs. their income. Or Fixed investment might slow down vs. capital consumption. But, differencing is tricky.

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Hegedus Aerodynamics

@HegedusAero

1 year

@BlacklionCTA Blue=indirect tendered, purple=direct tendered. Primaries have to put up a fight for their slice.

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring I'm pushing up act 4 to earlier. But, equity investors won't care, because it's a party!

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Hegedus Aerodynamics

@HegedusAero

1 year

@BickerinBrattle BEA was not including Federal Reserve Interest paid in their GDI calculation and just started to do so and revised previous numbers. I believe GDI popped up $350B? Anyway, point is, you may see savings numbers go up because business interest paid must go somewhere.

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Hegedus Aerodynamics

@HegedusAero

1 year

@BobEUnlimited IMO, at Jan Fed meeting JP had a vibe that the Fed was back on the curve and in control, that's when they started to fall behind the curve again. They are afraid of being in front of the curve and wiping out.

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Hegedus Aerodynamics

@HegedusAero

1 year

I wonder if, in part and certainly not near the whole, long term interest rates moved up because issuance is covering, in part, interest payments for Treasury Bills, where the expectation for rates is higher.

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring OK, but the question is, who is doing equity trading? Don't get me wrong, I'm with you. But, I'm sitting on cash, so my vote doesn't count till I go short. And, my type of shorting is dangerous. I don't play the wiggles.

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring Someone owns the machines. Is the question how do people earn money to pay for the goods/services the machines provide?

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring We might have already past peak nonfinancial corporate profit a while back...

FRED Economic Data

Nonfinancial Corporate Business: Profits After Tax (without IVA and CCAdj)

fred.stlouisfed.org

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring Not me, I'm hiding in "cash". 😀

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Hegedus Aerodynamics

@HegedusAero

10 months

@JimJame74888138 @dampedspring @pinebrookcap @Econ_Parker @Johncomiskey77 @M_C_Klein And, IMO, I've been bullshitted.

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Hegedus Aerodynamics

@HegedusAero

10 months

@dampedspring The market decided 10 yr was cheap vs. stocks. Rather than stocks expensive vs 10 yr. Asset/beta/term premium collection. As I spoke up about, and derided for, on Nov 12th.

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Hegedus Aerodynamics

@HegedusAero

1 year

@NickTimiraos How much of the unemployment is a result of services affected by work from home and empty commercial space?

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Hegedus Aerodynamics

@HegedusAero

1 year

Fed put a hawkish pause on rates due to economy, and it's possible businesses put a hawkish pause on price increases. Time will tell. We'll see what happens with wages.

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring Any thoughts about putting cash on that chart? 😀

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Hegedus Aerodynamics

@HegedusAero

1 year

@BaldingsWorld @pinebrookcap One factor is that government interest payments have skyrocketed.

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Hegedus Aerodynamics

@HegedusAero

1 year

@FedGuy12 It's a part of the refill of TGA. Some people parked their money in MMF and have gone back to buying bills.

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring Who's on First? 😀

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring Eventually, there might come a point where people receiving interest will have spent themselves out, in the GDP sense, and save the money instead. I'll let you know when my retired mom is tired of spending it. 😀

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Hegedus Aerodynamics

@HegedusAero

1 year

One can't invest on macro alone. That disregards the complexity of the markets. However, I don't get a warm feeling when I compare fed gov input to corp profit (orange) to (private fixed investment - consumption) (blue).

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Hegedus Aerodynamics

@HegedusAero

1 year

@BobEUnlimited @BickerinBrattle Oh, I also mentioned to him that Federal Interest Payments was sustaining corporate profit by means of GDI=GDP, at which he first told me "nonsense" and then agreed with the possibility. Just an example of me doing, at least, some homework. Feel free to confirm that with Andy.

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Hegedus Aerodynamics

@HegedusAero

1 year

Interesting, George Robertson blocked me after getting on my bad side by telling me, "go do some reading." Such is life.

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring @pinebrookcap I'll be forthright. I found his tweet about lags counter to my engineering experience and education.

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Hegedus Aerodynamics

@HegedusAero

10 months

@M_C_Klein Ditto. Count me in.

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Hegedus Aerodynamics

@HegedusAero

1 year

@Bturcan @dampedspring 😆 and the blue screen of death is still a thing. 😀

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring In part, is the US bond market reflecting downturn in Europe?

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Hegedus Aerodynamics

@HegedusAero

1 year

Much is said about economy, GDP, etc., but, and I'm just an amateur, investing is (in part, simplified, and IMO), about Net Operating Surplus from GDP vs. Interest payments. Orange=GDI Business Net Operating Surplus. Blue=Gov+Fed Interest payment. Purple=Net Business Interest.

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring And, they need to hope margins don't erode and buybacks are maintained. But, hopeium is a powerful drug.

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Hegedus Aerodynamics

@HegedusAero

10 months

@pinebrookcap @M_C_Klein I guess this will be a dumb question, but doesn't GDPNow measure the current Real annualized GDP growth rather than extrapolating it to the end of the quarter?

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Hegedus Aerodynamics

@HegedusAero

1 year

I thought this was cool. The list of commercial banks and their Bank ID. The sum of the top 25 Domestic Assets does add up to H.8 Large Domestic Chartered Commercial Banks. One can then get info about bank from FFIEC.

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Hegedus Aerodynamics

@HegedusAero

1 year

My armchair opinion is that two questions economics tries to answer are how much stuff gets created and how that stuff is distributed. Inflation vs. Wage is about how that stuff is distributed, business vs. worker. The desire to have (B vs. W) is one reason inflation raises.

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring What is the distinction between this and Oct/Nov of 2022?

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring @nickgiva1 @2GrayBeards Bills=T Securities<=1yr. Notes=T Securities >1yr & <= 11yrs. Bonds=T Securities > 11yrs. The spike at Jan 2020 could be an MFP input error that my program did not catch. Such is life.

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring Thank you for your time and post. And for being here and willing to bounce my thoughts.

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring @FedGuy12 OK. But banks, and others, also compete on the RRP market. So little can be said about RRPs from the Federal Reseve.

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Hegedus Aerodynamics

@HegedusAero

1 year

@concodanomics LOL, when I saw this. Thanks for the smile. 😀

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Hegedus Aerodynamics

@HegedusAero

10 months

@M_C_Klein @pinebrookcap Biggy Oops, "would *not* cover that up with Nov. and Dec." Sorry about that.

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring They did not all go out on time since Oct is deadline for many counties. But I would think $ is small relative to discussion.

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Hegedus Aerodynamics

@HegedusAero

10 months

@Johncomiskey77 My understanding is that "sterile" is when the reseve fund is created by purchasing an asset, such as a Treasury Security or MBS, while unsterile is if it is just created ("printed"), such as with the Fed loss.

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring Banks are mopping up money with RRPs backed by government securities. So cash that leaves comes back. In a sense, they are already paying %4.8 on some "deposits".

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring I think it's saying "buy my beer." 😀

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Hegedus Aerodynamics

@HegedusAero

1 year

@M_C_Klein @EconBerger When I looked at things over the last few days, I'm under the impression that unemployment rate is being driven by NY city area, Bay Area (CA), and Greater LA (CA). Currently, and IMO, national data is a red herring. Take CA and NY out, and I see a different, better, picture.

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring Probably better to rent on Soft Landing Island than own.

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring From Cash Balance section of "Treasury seeks to maintain funds sufficient to cover its one-week ahead cash need, which includes both net fiscal outflows and the gross volume of maturing marketable debt."

Quarterly Refunding Statement of Deputy Assistant Secretary for Federal Finance Brian Smith

WASHINGTON — The U.S. Department of the Treasury is offering $110 billion of Treasury securities to refund approximately $54.8 billion of privately-held Treasury notes and bonds maturing on February...

home.treasury.gov

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Hegedus Aerodynamics

@HegedusAero

1 year

If it is true, as hard as it is for me to believe, that Federal Reserve interest paid was/is not recorded on BEA Table 7.17, then annualized business income is low by 4*75,937M =$304B. Hopefully, I'll be able to talk to BEA next week.

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Hegedus Aerodynamics

@HegedusAero

1 year

T Bills are at 5.5%, and P/E is high. The narrative has switched from recession to nonrecession. Unemployment is low. Inflation is slowing down. If real growth slows down, what's the point in putting new money into stocks, at least over the next one or two quarters?

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Hegedus Aerodynamics

@HegedusAero

1 year

@BickerinBrattle Now that both your BEA "corp profits" and Ireland offshore does not include Fed "profit", is your question partially resolved? I was/am not sure exactly what you are referring to with "How is this possible".

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Hegedus Aerodynamics

@HegedusAero

1 year

@BobEUnlimited @EffMktHype But, there are those out there who don't know what a bond is, even if it hit them in the head. Equities and bitcoin are the thing. Buy the dip. HODL. Etc.

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring @FedGuy12 I updated plot again by adding FHLB. They provide T securities, Agency MBS, CDs, and CPs to MMFs, but no RRP. Orange=RRP not with Fed. Blue=Borrowing by all commercial-Fed Loans. PURPLE=FHLB. Just for fun/play, and I'm learning something.

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Hegedus Aerodynamics

@HegedusAero

1 year

Total weekly hours for all private employees (i.e. employees * weekly hrs) is still sort of flattish, but us seeing uptick. Total Private hours worked (yellow), 3 month moving average (orange).

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Hegedus Aerodynamics

@HegedusAero

1 year

@NickTimiraos Do these models take into account the stimulative effect of Federal Gov+Reserve interest payments?

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Hegedus Aerodynamics

@HegedusAero

1 year

Orange= TTM NAS100 income from SEC Q/K files. Blue=Cash from Operatons adjusted for depreciation, receivables, inventory, and share compensation. P/E is about 33. This is not prediction or advice.

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring @nickgiva1 @2GrayBeards A question. Sorry if it is dumb. What trade is this RRP/Bill targeting and/or labeled? And, is this something that would only take place in MMF RRP, or would it be occurring in other areas of the RRP marketplace?

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring Is the deficit spending explicitly only for Q1, or is it a quarterly average for all of 2024? $400B seems low if average.

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Hegedus Aerodynamics

@HegedusAero

1 year

@jhbaybick1 @pinebrookcap @benjaminMlavine @YannisLazar Then, it's just plan old fashioned random variable instead of the fancy termed stochastic? 😀

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Hegedus Aerodynamics

@HegedusAero

1 year

I guess it's time to contact someone at BLS to find out why aggregate unemployment rate from state data does not align with unemployment from national data. Aggregate state unemployment rate=3.47%. National unemployment rate=3.8%. I was hoping it would just resolve itself.

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring But it's nice to drive by seeing out the front rather than only the rear or side mirrors. 😀

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Hegedus Aerodynamics

@HegedusAero

1 year

One of the purposes of TGA is to be an emergency fund. And by emergency, I assume it means 💩 hits the fan big time. At one time, after 9/11, the idea was to have enough funds to cover things if Gov did not have access to bond markets for a time period.

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Hegedus Aerodynamics

@HegedusAero

1 year

@financialjuice Which poll is this?

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring It was a healthy day for cash. 😀

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Hegedus Aerodynamics

@HegedusAero

1 year

@BobEUnlimited From what I understand, 3.6% unemployment means we're at, or above, full potential.

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Hegedus Aerodynamics

@HegedusAero

1 year

Orange=private residential construction, blue=private nonresidential construction. Again, at least, as of today, they are not falling.

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring Just don't call them Romanians. Hegedus is not a Romainian name. 😀

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring @robbot4000 @SSidespin @KobeissiLetter My sim shows current annual interest on public debt, not including TIPS inflation, is ballpark $660B. In 4 years, with current yield curve, that increases to $950B, assuming securities roll over to same maturity. One needs to add GAS, TIPS inflation, and new issuance on top.

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring Yes, the European debt crisis.

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Hegedus Aerodynamics

@HegedusAero

1 year

@concodanomics What's a "full employment" recession?

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring The American People got something the market could "climb the wall of worry" about.

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Hegedus Aerodynamics

@HegedusAero

10 months

@pinebrookcap And the 10 yr is 3.9%! I wish this was a book, and I could jump to the last chapter! 😀

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring Does this imply that if Fed bumps up short term rates, and 10 yr remain stable, equities move up ?

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Hegedus Aerodynamics

@HegedusAero

1 year

In this thread, Andy tells me, "so if you want to create a silly corner case where we pay redemptions and spending...", and I'm certainly not happy about that attitude towards me. A plot to show my thinking. Description below.

Andy Constan

@dampedspring

1 year

@trader_mtg @NoBagHolder Yep. Sucka that it's Ill defined but above 750BN is freaking obvious.

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Hegedus Aerodynamics

@HegedusAero

1 year

@pinebrookcap $$ And, PayPal. IMO. I believe Venmo is owned by PayPal? Venmo was mentioned by Joey.

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Hegedus Aerodynamics

@HegedusAero

1 year

@BickerinBrattle Equities have resistance because interest payments look good. Don't get me wrong. I think things are at the party stage so, IMO, equities will improve once bond rates stabilize.

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Hegedus Aerodynamics

@HegedusAero

1 year

IMO, the most interesting thing about filling up the TGA is to see if banks borrow more to replenish any lost reserves.

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Hegedus Aerodynamics

@HegedusAero

10 months

@M_C_Klein @Econ_Parker I live in the Bay Area (CA), and things don't seem like they are unraveling. Yes, the economic environment is different than when rates were low, but people and businesses are adapting.

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring Or, maybe, Primaries got a phone call from the Treasury? 😀

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Hegedus Aerodynamics

@HegedusAero

1 year

@M_C_Klein Then we would just play other mind games. 😀

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Hegedus Aerodynamics

@HegedusAero

1 year

@dampedspring The only way to get to Recession Island is by means of Soft Landing Island. So, of course, he sees signs of it. That does not mean the boat stops there. Less cryptic, people must be convinced of H4L to have a recession.

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Hegedus Aerodynamics

@HegedusAero

1 year

Investing between 2011 and 2015 was nice because fixed investment was going up, unemployment down, P/E was relatively low, and interest rates were low. IMO, the current situation is a different beast. But, I do not have a crystal ball.

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Hegedus Aerodynamics

@HegedusAero

1 year

@BobEUnlimited The counter argument is that the Taylor Rule is crap. Which it probably is given how simplistic it is.

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