Super Tuesday Fallout

Summary

Discussion of the potential effects on equity, bond, commodity, capital and asset markets regarding:

Seasonal Monetary Flows; Commodities Bottom.

Means of Payment; Employment Taxes.

Beneficial Stimulus; Notes and Nuances.

Super Tuesday seems to have put The Donald Trump ($4B) and Hillary Clinton ($111M) in control of the presidential primary races. Bernie Sanders ($460K) could make some waves, but pragmatically he might be able to garner a VP nomination to unify the Democrats. TBD. The bigger question, at the end of the day, what kind of economic conditions or potential fallout will the victor inherit for their inauguration? BTW - Candidate net worth in parentheses.

Seasonal Monetary Flows

Take the red pill and follow me down the rabbit hole... try this chart on for size, do you see the seasonal patterns in the economic heartbeat or monetary flows? The data series used for reserve balances required is based upon "on demand" deposits, which are our "means of payment" for goods and services, i.e. a proxy for potential aggregate demand.

Above note quarterly with mid and year end declines pronounced. Note mid Nov thru Dec end - a sharp decline. Note Dec end through start of Feb an increase, then a final sharp drop in mid Feb. Go find mid FEB in each year 2012 -7.6%; 2013 -8.3%; 2014 -11.7%; 2015 -17.4%; 2016 ??? Can you fill in the blank in this series? I can, Feb 18 2016 -22.8%; the largest % post crisis downswing since Feb 10th, 2010; the 5th largest all time; the largest all time in dollar volume est. $25B.

Commodities Bottom?

What does this seasonality of monetary flow mean? For one thing, with the reporting latency or maintenance lag, around 30 days, (the reserve requirements are based upon average deposits held 43 to 30 days prior) there's a case for a potential near term bottom in commodities (in particular oil) having been put in mid February when WTI hit $26.11 on Feb 11th, 2016, coincidence? Lee Roy Jethro Gibbs Rule 39 - there are no coincidences.

This missive was published as an exclusive to Seeking Alpha.  To access the ENTIRE text for FREE on Seeking Alpha, please click here.  The Nattering One does not receive remuneration if you register, only satisfaction.

There is no cost involved and it has been our experience that if you exert control (by unchecking a box of two) over your communications settings in your Seeking Alpha profile, your email inbox will not be polluted with one bit of Spam (not even the cured pork shoulder variety. Tasty even.)

As we are now a "contributor" at Seeking Alpha, our published articles, instablog and comments can be found here.  Please continue to follow The Nattering Naybob here and at Seeking Alpha. We thank you for your support.