Stocks Will Get Crushed By New Treasury Issuance; End of QE

``While Treasury supply will increase, the trend of demand for Treasuries has been going the other way... The Federal Reserve has given the market extraordinary support over the past eight years by financing most new Treasury supply. Even after it stopped outright Quantitative Easing in November of 2014, the Fed continued to buy $25--$45 billion per month in maturing Mortgage Backed Securities from the primary dealers. That cashed up the dealers and helped finance their purchases of new Treasuries... But now, the Fed intends to join the Treasury as a net seller of Treasuries (and MBS) as it starts to reduce its balance sheet this fall. Once the Fed stops buying that paper, the dealers will have a lot less cash and that means a lot more selling.''