Issue 3 of the Monday letter. The composite reads 47, regime STRAIN. 5 pre-registered calls for the week and 1 dated items on the calendar. Last week's calls graded 2 of 4, misses first.
Issue 3 · the week of 2026-08-17 · the sections run in the same order every week, and section 6 grades what section 5 said last time.
Monday's reading: 47 out of 100, STRAIN, on 94% coverage. The Tell reads +37, plumbing at the 64th percentile of its own history against the market's 27th. There are 1 dated items inside the next ten days and 5 calls on the record below.
The single question this week is whether the spread starts answering to reserve changes now that the system is $759B through the fitted kink. Everything under it is either a date, a number the desk expects, or a number the desk got wrong last week.
| date | event | expected funding impact | what the desk watches |
|---|---|---|---|
| 2026-08-20 (Thu) | Auction settlement | $266B settles, reserves fall as the TGA builds | the supply desk is dark, so this is gross settlement and not net new cash |
1 dated items inside ten days. The one to diary: Auction settlement, 2026-08-20 (Thu). Dates are the part of funding stress that is knowable in advance, which is why they lead this letter rather than close it.
The supply desk is dark this week (no auction history). When it is live this section carries the forward cash table: every settlement date with bills, coupons and maturing paper, and the net new cash that is the reserve drain the calendar forces, with announced rows kept visibly apart from the house projection.
| leg | 13w end level $B | kink crossing |
|---|---|---|
| base | 2,885 | 2026-08-12 |
| fast drain | 2,830 | 2026-08-12 |
| slow | 2,885 | 2026-08-12 |
The legs share one arithmetic and differ on three stated assumptions: a trailing drift of -12.2B a week, a runoff pace of $0B a month, and a TGA now at $959B reverting to its trailing median of $860B on the base leg or its p75 of $915B on the fast one. This is arithmetic on published assumptions, not a forecast of policy, and the trailing drift already embeds recent runoff, so the explicit terms can double count.
The kink itself sits near $3,703B of reserves against $2,944B held, $759B below the estimate, on a fit with R² 0.62 and a model versus market consistency of 0.89. Through the kink is where the spread starts answering to reserve changes, so the week's job is watching the slope, not the distance.
External check on the same curve: the NY Fed's latest Reserve Demand Elasticity print (2026-07-06) reads -0.27bp per one percent of reserves with a 68% band of [-0.44, -0.09]; the desk's continuous fit implies -0.30bp, inside that band, and the direction agrees, which the desk publishes 37 days ahead of their release cycle. Across 18 walk forward refits the desk landed inside their 68% band 8 times and agreed on direction 10 times, mean absolute difference 0.26bp.
Registered 5 calls for the week of 2026-08-17. Each carries a stable ID, the number the desk expects, the date it resolves and the rule that decides it. Next Monday's issue opens by grading them, misses first.
| id | verdict | expected | actual | the call |
|---|---|---|---|---|
| W2-3 | MISS | $3,044B, tolerance $25B (the width of the desk's own fast to slow bracket at week one, floored at $25B) | $2,944B | Reserves print near $3,044B on next week's H.4.1, the base leg's week one level. |
| W2-4 | MISS | 42.3 to 46.9, from 45.0 today; the band is the board's own Monte Carlo p10 to p90 at 5 sessions, seeded fixed so the band is reproducible | 47.0 | The composite reads between 42.3 and 46.9 on next week's board. |
| W2-2 | HIT | under $1B; the trailing twenty session maximum today is $0.10B | $0.10B twenty session maximum | SRF take-up stays under $1B on every session of the week, which is to say it stays below the de minimis line. |
| W2-5 | HIT | inside [-0.44, -0.09]bp per one percent of reserves; the desk reads -0.30bp today | inside the band at -0.30bp | The desk's continuous reserve demand fit stays inside the NY Fed's published 68% band. |
| W1-1 | OPEN | +107B net new cash, tolerance $10.7B | the supply desk is dark | The 2026-08-25 settlement, which the board carries at +107B of net new cash (the board's own projection), lands within $10.7B of that figure once Treasury has announced it. |
| W2-1 | OPEN | +104B net new cash, tolerance $10.4B | the supply desk is dark | The 2026-08-25 settlement, which the board carries at +104B of net new cash (the board's own projection), lands within $10.4B of that figure once Treasury has announced it. |
Last week: 2 miss, 2 hit, 2 still open. Lifetime the desk has resolved 8 calls and hit 5 of them, 62%. Open calls carry one more week rather than quietly vanish: W2-1. Dropped unresolved after a second week without the data to settle them: W1-1.
An open call is one the data could not settle, usually a dark engine or a settlement still carried as projected. It is never scored as a hit.
The falsifier ledger travels with the regime and the IDs are stable, so a regular can watch the distance close instead of rereading a static sentence.
The desk has resolved 8 calls across the run of this letter and hit 5 of them, missing 3. The ledger only counts calls the data actually settled; open ones are carried, not quietly counted as wins.
| id | kind | resolves | grading rule |
|---|---|---|---|
| W3-1 | srf | 2026-08-24 | hit if next week's board shows a twenty session maximum take-up under the threshold, miss if any session prints at or above it |
| W3-2 | reserves | 2026-08-24 | hit if next week's board carries current reserves within tolerance of the target, miss otherwise |
| W3-3 | composite | 2026-08-24 | hit if next week's composite prints inside the band, miss otherwise |
| W3-4 | rde | 2026-08-24 | hit if next week's nowcast still reports the same side of their band, miss if it flips; open if either fit is dark |
| W3-5 | court | 2026-08-24 | hit if next week's pooled odds sit inside the band, miss otherwise |
Start 2,944B on 2026-08-12, trailing drift -12.2B a week over 13 weeks, runoff $0B a month, TGA $959B now against a median of $860B and a p75 of $915B, ON RRP $0.2B, settlements $290B gross counted at 25% passthrough.
The calls above were written before the week ran and are stored in the letter's own state file, so next Monday's issue grades exactly this list and not a convenient subset of it. The board recomputes six times a day; this issue freezes one Monday reading of it. Free public data with native lags. Not investment advice.