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Avatar photo Doug Kass on August 20, 2026

Position: None

Howling About Treasury’s ‘Hocus Pocus’

Avatar photo Doug Kass on August 20, 2026

Wolf Street howls about the Treasury’s hocus pocus announcement.

To Absorb $1 Trillion of New Treasuries in 3 Months, as the Debt Ballooned to $40 Trillion, Investors Demanded Higher Yields. Bessent Blows Fuse | Wolf Street

From Wolf: 

The Treasury Department cannot create money, unlike the Fed. It has to sell new securities to buy back old securities. The buybacks are just a debt swap. And Bessent could accomplish the same thing but in much larger quantities by keeping auctions of long-term notes and bonds unchanged, and increasing the T-bill auctions, and thereby shifting issuance to T-bills, and it’s already doing that.

But Bessent wanted to soothe the bond market on the spooky day that the Treasury debt hit $40 trillion. So he came out with the hocus-pocus announcement, and long-term yields fell instantly, though the actual increase of the buybacks won’t start till September 9, and though the amounts are small compared to the $1 trillion in new debt that investors have to buy every three to five months going forward, and tiny compared to the $40 trillion in Treasury securities outstanding [my detailed analysis of Bessent’s hocus-pocus show is here].

This is similar to what I wrote yesterday:

The Treasury Announcement: What It Is and Isn’t

The Treasury announcement is broadly being mis-interpreted as usual, due to hype from the usual suspects including Fin TV.

It is just a twist, not money printing. 

Whatever they buy more of on the long end, they will have to issue on the short end to finance the purchases.

And the dollars involved are limited.

Anyway, this is not QE or money printing, only the Fed can do that. Treasury has no authority or ability to print money.

BY Doug Kass · Aug 19, 2026, 12:01 PM EDT

Position: None

Oscillator Back to Slightly Overbought

Avatar photo Doug Kass on August 20, 2026

The S&P Short Range Oscillator is back to (slightly) overbought at 0.56% vs. -0.43%.

I reshorted $SPY when futures were +42 handles in Wednesday’s rally (S&P cash closed up by +15 handles on the day) before covering early this morning.

Position: None

Early Morning Trading (4:34 AM)

Avatar photo Doug Kass on August 20, 2026

* I covered my SPY short after a reversal lower in S&P futures early this morning

With S&P futures -12 handles and about 40 handles lower than where I shorted $SPY in yesterday’s rally, I have covered my SPY short for a nice profit:

* SPY  $767.96

From yesterday:

SPY Add

Added to (SPY) short at $771.14.

Positions: Short SPY S

BY Doug Kass · Aug 19, 2026, 10:52 AM EDT

I currently have no index shorts on — but that will change in any rally attempt… 

Position: None