Mea Culpa, But the Fed's Still Unsure About Equities (pfblogs.org)

Macro Man submits: We all make mistakes. One of the benefits of blogging is that when you make one, you tend to have it pointed out to you. A couple of days ago, Macro Man ran a chart purporting to show the close relationship between the Fed custody holdings for foreign central banks and the trajectory of the S&P 500. The chart generated a fair amount of commenting in the comments section of the post, in Macro Man's email box, and elsewhere in the blogosphere. The substance of this comment was "that's not right." So Macro Man went back and checked...and it turns out it wasn't right. Mea culpa. [Editor's Note: this post has been corrected here.] One of the problems with following so many self-calculated indicators is that you sometimes forget which is which. Thursday's chart showed total central bank Agency and Treasury holdings at the Fed, both for the Fed's own account and on behalf of foreign central banks. Obviously, the alphabet soup of measures taken by the Federal Reserve has reduced its holding of Treasuries on its balance sheet, thereby exerting a negative influence on the indicator in the published chart.Complete Story » ...