Heads up if you missed it: The Fed confirmed they are injecting liquidity by purchasing $40 billion in short-term Treasuries over the coming month.
Operations officially started today, Dec 12. While the market is focusing on Powell's comments, the plumbing is getting fixed. The effects of liquidity ops usually lag by a few weeks.
The red candle is just Santa's hat, the green Christmas tree is being printed in Benjamins.
TLDR: Santa is coming to town, red hat to go down first 🔺️🎅, before full christmas tree green up 🎄💸
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Hot Fed Injection
Flair him
Quantitative Edging
Quantum Cumputing
Rimming?
Yes
This is QE isn't it?
Reserve Management is the new term
Step-Reserve Manager, what are you doing?!
Back in the 'ole empire decline days we called this damage control (until collapse)
I think it should be called "regard management"
No it actually isn’t. The money is being injected to try to keep the banks from collapsing. Basically putting a bandaid on the debt
They are printing money to buy bonds.
Heads up if you missed it: The Fed confirmed they are injecting liquidity by purchasing $40 billion in short-term Treasuries over the coming month.
This is quantitative easing. It's what they did in 2008.......
RMPs Are NOT QE: The Fed is starting Reserve Management Purchases (RMPs). The Fed will buy assets to manage the financial system's liquidity. This is NOT QE. This is a huge red flag that something isn't right and there problems with the banking system
(lyn alden)
So the Fed is being proactive instead of reactive for once. Isn't that a good sign they're doing what they can to keep the markets stable?
You're kidding yourself if you think the markets are stable.
we are doing qe and bailouts. This is a crash
Burry is that you man?
they been doing this since 2008. also, they propped stocks during covid as well by buying corp bonds
“Oh my god I’m so close, I’m about to PRINT! Make me Print Daddy Jpow”!
Pump that liquidity into me Santa Powell.
Please flair him
Thats my favorite Christmas Carol
Fed Hot Love
I need someone to explain this to me
That’s so erotic
I blinked, I also understand 40 billion is really a drop of piss in a pool of shit. Best regards
In the grand scheme/long term yes. But like your CC bill; as long as you can make that minimum payment for the next month or 2 things will still seem normal to good.
After that... well we will see.
Bro just open another credit card to make the min payments on the others what could go wrong
Nice
Good timing, but probably too little. Will see how the carry trade closes if Japan raises rates next week. Hoping they delay or have already started unwinding so it’s not too brutal.
https://preview.redd.it/sv8me5jhlv6g1.jpeg?width=447&format=pjpg&auto=webp&s=29e776e5da8696089ab45b1f95ec62cf0657eabe
What happens next in this scene?
It keeps getting bigger and bigger and thats actually the finale to SpongeBob
So it just keeps getting bigger and they all live happily ever after?
....yes
Just like your mom huh
Calls then?
The market can stay irrational longer than you can stay solvent.
Buy things that aren't going to drop when the pop happens.
So puts?
anything already at zero
Everyday essentials like LVMH
Once a week, just to check in and say hi to her.
It grows bigger and bigger until it pops, painting all of mr krabs walls missing all his paintings, except for one tiny blemish on his favorite painting (your portfolio).
Your honor, I ghost came and covered my portfolio in ectoplasm!
They play with the bubble for a bit, then carefully deflate it, fold it away, and go for coffee.
Nothing, they all lived happily ever after on yachts in paradise. Stop asking stupid questions.
I've been seeing this exact image for the last 5 years
Wow I can literally hear their voices with this
https://preview.redd.it/gt3b0n2div6g1.png?width=640&format=png&auto=webp&s=a11ede16e5080326334d9612cbda641795f382f8
I love seeing this and then noticing you're a Top 1% Commenter hahah
I mean, that's top 1% quality content.
The other 99% of their posts though….
I read that you loved it as hes a top.... and was like... well.... makes sense
Hey man, us bottoms gotta stick together.
Well hello there Mr. Tripod
I was thinking about this today because I had the red one downloaded but not the green one. Thanks I have added to the collection
can we get a mad max meme of dumping $40B of water on the thirsty poors?
https://preview.redd.it/if7xdo17ew6g1.png?width=1024&format=png&auto=webp&s=7d745d41d5e9ce26738a0018361930b2bc543d21
40B is nothing lol. NVDA moves that much or more on random days
Trashla pumped that today, on the news that their US sales are at a 5 year low.
It’s not actually 40b moving it.
If there’s no buyer for a sell it could move $10 on 1 share. It would lose 50b market cap but all it took was $180.
It’s the same dollars by bots trading it daily.
Eli-69
You’re old. Go to sleep now
Cialis engaged
Disengage CPAP
Reeeeengage chromosome 23
REEEEEEEEEEEEEEEEEEEEE!!!!
Almost old enough to run for U.S. Senate.
Let’s not get ahead of ourselves. They’re only at the age where they can be a clerk for the House of Representatives. They’ll need another millennia or two before they can run for the Senate.
ELI 59
One day the price of a Nvidia share is $190. People buy and sell it for that price. Then the market closes for the day and most of the outstanding buy and sell orders expire. Then in the evening after the stock market is closed, news come out that Google has a better AI model than OpenAI, and people decide that Nvidia shares are only worth $180. The next morning when the market opens, the people who had buy orders for $190 the day before don't renew those orders at $190 but instead they renew them at $180. So then the price is $180 because that's the most anyone is willing to buy it for.
Explain like I'm 5
When people say a stock “moved $40B,” they usually mean that its market capitalization changed by $40B, not that $40B of cash actually flowed into or out of the stock. Market cap is simply the stock price multiplied by the number of shares outstanding, so a relatively small change in price can create a massive change in market cap for a large company like NVIDIA.
A stock’s price is determined by the most recent trade, not by the total amount of money invested in the company. Only the shares that actually trade affect the price. For example, if a company has 1 billion shares outstanding and the stock is trading at $100, its market cap is $100B. If a single share trades at $101, the new market cap becomes $101B. That’s a $1B increase in market value caused by just one $101 transaction.
This is why it’s possible, in theory, for a stock to lose or gain tens of billions in market cap with very little actual money changing hands. If liquidity is thin and the last trade happens at a much lower price, the entire company is repriced at that level. Even though only one share traded, all outstanding shares are now valued at the new price, creating a huge paper gain or loss.
At its core, a stock is only worth what someone is willing to pay for it at that moment. If only one share is for sale at $1,000 and someone buys it at that price, then the market price of the stock is $1,000, even if every other shareholder thinks that price is absurd. Until another trade happens at a different price, that is the stock’s official value.
Most daily trading is driven by algorithms and market makers reusing the same pool of capital over and over. This constant buying and selling sets prices, but it doesn’t mean that equivalent amounts of “new money” are flowing in or out. A relatively small amount of active trading can reprice an enormous number of shares.
That’s why a company like NVIDIA can appear to “move $40B on a random day.” The move is mostly a revaluation, not a cash transfer. The market is simply agreeing, based on recent trades, to value all shares higher or lower than before.
Honestly this is one of the best ELI5s I’ve seen in wsb.
Now do The Greeks.
Haha, that’s a much bigger topic, but I’m happy to try and explain it.
At a high level, the Greeks just describe how an option’s price reacts when different things change. This is most important, and a mistake I always see people make……they don’t predict direction, they measure sensitivity. An option’s value mainly depends on the stock price, time, volatility, and (to a much smaller extent) interest rates. Each Greek isolates one of those factors so you can see what’s actually driving your profit and loss.
Delta measures how much an option’s price changes when the stock moves $1. If a call has a delta of 0.60, the option will move about $0.60 for every $1 move in the stock. A -0.40 delta put would move about $0.40 in the opposite direction. You can think of delta as “stock like exposure.” A 0.60 delta call behaves roughly like owning 60 shares, and deep in the money options have deltas closer to 1 (or -1 for puts). It’s important to remember that delta is a local estimate, not a promise, it’s most accurate for small stock moves, and it changes as the stock price changes.
Gamma tells you how fast delta changes as the stock moves. Delta isn’t fixed, it increases or decreases depending on price movement. If an option has a delta of 0.50 and a gamma of 0.10, a $1 move in the stock pushes the delta to about 0.60. Gamma is highest for at the money options and near expiration, which is why short dated options can suddenly feel very aggressive or unstable.
Theta is time decay. It measures how much value an option loses each day just because time passes. If theta is -0.05, the option loses about five cents per day assuming nothing else changes. This decay speeds up as expiration approaches, especially for at the money options. Option buyers pay theta; option sellers collect it. This is why being right on direction but wrong on timing can still fuck your money.
Vega measures sensitivity to volatility. If vega is 0.10, a 1% increase in implied volatility adds about $0.10 to the option price. Volatility usually rises before events like earnings and then collapses afterward (IV crush). That means you can be right on direction and still lose money if volatility drops hard enough.
Rho measures sensitivity to interest rates, but for most retail traders it barely matters. It mainly shows up in long dated options or when interest rates change significantly, so most people don’t spend much time worrying about it. (Certainly not anyone on this sub)
The important thing is that the Greeks work together, not in isolation. A stock can move in your favor (delta helps), but time decay (theta) and falling volatility (vega) can still overpower the trade. That’s why options trading is less about just “up or down” and more about understanding what you’re actually exposed to. It’s all about exposure.
The simplest way to remember it: delta is direction, gamma is how unstable that direction is, theta is time working against you, vega is volatility risk, and rho is mostly background noise. Once you see options through that lens, the pricing starts to make a lot more sense.
You’re alright in my book. You Ai?
If I could trade like algos, maybe my account wouldn’t feel like it’s on a rollercoaster every day.
i was totally thinking you'd explain the greek people lmao
I understand the greeks and I'm still saving your post because it's such a good, clear explanation to refer to if/when people like my parents/noon-financial friends ask me about stuff.
Appreciate it. Hopefully, this helps people understand a bit better.
Dude named Odysseus spends 10 years trying to get home after the Trojan War, but everything goes wrong because he angers Poseidon and keeps losing to theta, gamma, and vega while his wife waits at home with her boyfriend.
That was more like I was 8 but it got me where I needed!
Very well explained. I’m saving your comment. Thank you.
Awesome man. Glad it helped.
Things are only worth what someone is willing to pay.
If only one person is selling a single share on the whole market for $1000, and then someone buys that single share for $1000, then the stock is worth $1000 on the market.
Exactly. You don’t need 1% of the market cap to raise the market cap 1%
NVDA is traded more volume than SPY/QQQ combined. I believe companies are profiting more from writing options on NVDA and it’s not really going anywhere.
which is pretty fun since it shows that when this bubble pops, it isn't even possible to make a bailout with public money. people lost their shit in 2008 with the 700B bailout, but how are we gonna "save" one of these tech giants if one of the mag7 pops? no one will accept a 10T package or something crazy like that.
Inflation is back on the menu bois
It’s actually the opposite of nothing in this reality.
The difference is, this 40B didn’t exist until now
Didn't we send that much to Argentina to prop up the cattle ranchers?
No that was to bailout the prez friends on there risky bets.
the Fed can play with leverage too, they just slide it over to 1000X
Those aren't the same 40B at all.
They are injecting 0.13% of the NYSE's value? Oh man, this should move markets...
Bigly
Huge if true
Puts it is.
Fuck your puts
omg its jpow
He's got you by the balls
You better not do puts. You better not do calls!
Fuck you. Fuck your calls.
Trying to get into heaven by staying poor eh? Lol
The injection is into the front end of the yield curve (short term Treasuries), not directly into the stock market. Of course that liquidity ends up making its way to the stock market eventually. That's why 1–3 Year Treasuries (e.g., SHY) were trending upward today while the stock market and longer term Treasuries were selling off
No one seems to want to read any commentary and just jump the gun and call this QE. They are keeping the Fed balance sheet as a fixed % of US GDP.
Bruh read the room, and join the circlejerk.
Definitely never ever gonna do QE again
They will likely do some sort of QE (but not exactly) at some point (they will have to right?), but good call they are just keeping the balance sheet stable basically
You can take this entirely sensible and useful comment and ske-right-the-daddle outta here
Thanks for the extra wrinkle.
Sell the news as always
How to borrow from the lender of last resort without having to ask permission v9102
Isn’t it still close to ATH.
It is. Barely moved in the last 90 days. Sold down 5-6%, came right back up, touched the ATH, came back down a small amount.
The US economy is like a runner with a 5 minute lead halfway through an Ironman, but the whole pack is closing the gap.
This is the dumbest shit. Like 40 billion is going move anything. It’s less then .5% of the market
That's .5% of the market per month.
Since I assume your trying to make this sound good I did the math:
The US market is valued at 71 trillion 40 billion is 0.0563% literally equivalent to adding 6 Pennie’s to try and make a dollar. Keeping trying, it’s still shit.
6 pennies would be 6%
this is 6 hundredths of a penny
you're in the right sub
You’re right. I didn’t have enough fingers to count on
That's 6 pennies per month.
Calls
On gold and miners.
Calls but not because of this shitpost
The combined jobs report is going to reflect all the delayed retirements from DOGE cuts and all the tech layoffs. Cracks are starting to show in the AI circular economy where the Mag 7 are all trading the same dollar between them a dozen times and calling it revenue growth. Next week is gonna be hectic.
40B only ?? shit I spend that much on NVDA weeklies only
Lowering interest rates and injecting liquidity are not normally signs of a healthy economic period.
Neither is it healthy when the Fed themselves state that they believe the “economy is not creating jobs” at this time.
you sayin that we could got from the B to the R, to the R, to the R?
The question is: $40 billion once? Or $40 billion once a month?
Hourly
Monthly
They are not going to inject 40 billion month a) indefinitely and b) following values could be smaller
40 billion daily he said
Bull cope
puts
Let the loans default please.
I went full port on SQQQ Friday at close. Fuck this market and fuck your optimism. See you Monday morning r***rds
https://preview.redd.it/lomphr8hqv6g1.png?width=1080&format=png&auto=webp&s=bf1959734b179d7d58eb5a3e42bc034024005488
Fucking barf
https://preview.redd.it/7t20te2izv6g1.jpeg?width=598&format=pjpg&auto=webp&s=f241e0cf84f17e993280102a170153966a48e204
If the economy is crash then where the fuck are people gonna keep their money?
Pokemon cards
You meant the Zimbabwe dollars?
Never lived through a recession huh?
Brrr
Christmas is saved....just like in the movies!
$40b is nothing lol
Next bubble incoming
El problema de los bonos siempre enmascarado. La deuda será el gran problema algún día, aunque la FED quiera posponerlo. Cuánto más tarde peor será el colapso. Cada vez más, cada pais intenta minimizar y enmascarar el problema interno, los inversores externos van disminuyendo, cada vez hay menos demanda y aquí cada uno intenta aguantar su problema nacional. La FED está alimentando dos problemas a la vez, bajando tipos de interés para que el mercado bursátil no caiga, empeorando las próximas subidas de inflación y a la vez alimentando la burbuja de deuda bajando tipos (lo que a su vez la hace menos atractiva conforme va siendo más peligrosa). Solo falta que los consumidores griten que el rey está desnudo para que algo se rompa y empiecen los problemas que estaban ahí pero nadie quería verlos ...
$40bn is pocket change for the market. Thats not gonna do shit
They just ended QT and now we’re back at QE?
I’ve heard so much about how important it will be to refinance US debt into long duration bonds at a low rate. That was supposed to be the big treasury goal.
So when do they force the long rates down?
That’s absolutely macro-relevant.
dont fight the fed is what i learned since covid
What are the odds that this monthly injection counteracts the rate of unraveling of the yen carry trade?
Call the operations what you will, and something is certainly getting "fixed."
But that something ain't the plumbing and the fix that's happening isn't a fix in the way that you expressed it.
Let's make money, but let's also keep it real.
End of year is also sell off season. Puts until 1/1/26
So buy puts, got it
40 billion is nothing in the stock markets
Has japan done the thing yet?
BTC will pump sat and Sunday to start things off. Mark this comment
Lmao "red hat to go down first" - that's some next level hopium right there 😂
But seriously though, you might be onto something with the liquidity lag. Market's too busy having a meltdown over Powell's vibes to notice the money printer warming up in the background
I thought powell was bullish?
That's the thing with Powell, he's both bullish and bearish at the same time, how he appears depends on the observer
Schrodinger's Powell
40 inch injection
Interesting
Is that really going to make a difference?
So I guess I shouldn't be autorolling my T-bills this month.
JPow warming up the printer like it’s a space heater.
Must've been nice doing business the last few months!
So....buy SPY?
Santa may be early, but CPI is still the bouncer at the door 🎅📈
You mean Santa rally starts Monday, experienced huge paper loss on HOOD calls today. 12/19 130c still has a chance.
Il all went in TSLA apparently
This just makes me happy that I invested the maximum in I-bonds
is that a lot? doesnt sound so much
Honestly when businesses are valued in the trillions, talks of tens of billions doesn't even register with me anymore.
My brain just thinks "what's that gonna do"
Fucking mad.
Is this sub just whoever can get chatgpt to shit out the most incendiary slop for the hogs to salivate over
Ah so thats why banks remained green on Friday Lol
Let's see, the market also went up during the year, without any catalyst, when companies were barely making a move, stupidly.
In low liquidity environment banks end up calling for loans to be paid in full which caused businesses to go bankrupt and people losing jobs. The temporary open market operation provides enough liquidity so banks don't have to call for loans and bankruptcies don't occur. It doesn't provide relief to private credit though, and if damage to the underlying economy is bad enough, it won't be enough to save anyone.
The real question here is “what” credit and demand dried up? Long term yields are rising, and the fed needs to buy short term…..so the market (bond) is flashing that they don’t believe the Fed, and what greater yield for the inflationary risk to their money. Somehow, private credit is drying up. Inflation is sky high again. Wait for the whole market to reprice.
And I just sold 🙈
You know what this means? More self serve car washes and self storage construction!
40 billion? I buy sell that much in a day
yaaay!!! 40b injection is bullish...
narrator: you idiot fucks...
I mean this has kinda been a thing for awhile. Bessent has said the U.S. is basically moving to a klarna system with debt issuance. 4/13 weeks. May had an embarrassing 20ye auction though the one before the shutdown went fine. Fed cuts. Treasury floods and crunches the tail. Interest rates go up. Citadel makes money in the caymans by arbing the auctions. Short the new using old treasuries as the collateral for 50x leverage. Repo crisis 2.0 here we come baby
What’s the historical precedent for this logic? Serious question, trying to learn something new.
Injeculation