Posts Tagged ‘ Balance Sheet ’

The Treasury settled $49.7 billion in newly issued debt last week. Surprise, surprise, that’s almost the exact amount of MBS securities the Fed settled to its balance sheet. It has to be a matter of some consternation to Bernanke and Co. that even though the Fed has been conducting these back door maneuvers to...
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The Fed’s balance sheet shrank again last week as it settled only a couple billion in securities purchases which wasn’t enough to offset declining levels of alphabet soup. The Treasury market got whacked by big supply. Even though bid covers were strong, buyers wanted higher yields as they bought into the economic recovery story,...
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The Treasury finished up a light week with a 4 week bill auction that drew another wave of panic buying keep the rate near zero. There’s no real sign of a letup to the mania, as terrified investors continue to seek the “safety” of the shortest term Treasuries. Panic behavior of this nature...
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The Fed’s balance sheet made a giant sucking sound this week as the Fed added little in the way of new securities holdings and alphabet soup programs continued to contract. This week that contraction was huge. The Fed’s shrinking balance sheet was mimicked by the stock market, as Ben’s Pawn and Loan put the...
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Critics of the Fed have expressed concern about the inflationary implications of the huge expansion of the Fed’s balance sheet, particularly excess reserves. The reserve bulge was created  when the Fed expanded the alphabet soup programs in 2008. At the same time the Fed began paying interest on reserves, paying 1%, which was .75%...
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The Fed’s balance sheet shrinkage trend continued this week as ongoing drops in Alphabet Soup outstripped the amount of securities the Fed bought directly. Commercial paper’s shrinkage problem also continued, as did that of retail money market funds as holders liquidated in order to meet current obligations. Click here to download complete...
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There was another large drop in the size of the Fed’s balance sheet this week as both TAF, central bank liquidity swaps, and CPR all declined sharply. The Fed bought a ton of paper again, but it was not enough to prevent contraction of the balance sheet, which has now shrunken by over 10%...
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The Fed’s H41 report was released this evening. Friday’s report will include a review and analysis of that data. An initial glance at this week’s data shows another large drop in the size of the Fed’s balance sheet as both TAF and central bank liquidity swaps declined sharply. Click here to download...
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Its balance sheet grew this week as the Fed closed on a large amount of forward purchases of MBS. That and their GSE and Treasury purchases were enough to offset a large decline in alphabet soup. Since mid March, the trend of increasing Fed securities holdings and declining alphabet soup have exactly offset one...
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The Fed’s balance sheet contracted again last week as the alphabet soup programs continued to contract, and the Fed didn’t do enough direct buying of securities to offset that drop prior to the Wednesday statement date. Click here to download complete report in pdf format (Professional Edition Subscribers). Try the Professional...
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The Fed’s balance sheet contracted again this week as the alphabet soup programs continued to contract, and the Fed didn’t do enough direct buying of securities to offset that drop prior to the Wednesday statement date. Click here to download complete report in pdf format (Professional Edition Subscribers). Try the Professional Edition...
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The Fed’s balance sheet took a huge drop last week. In spite of all of the direct buying of securities total Fed credit has actually declined slightly since December thanks to the winding down of many of the Fed’s alphabet soup programs, some of which have already gone back to zero balances. Meanwhile the...
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The Fed made a massive addition to its balance sheet this week. Most of it was comprised of a huge settlement of previously committed purchases of MBS paper. I have hypothesized in past reports that these MBS buys would not help the market because they simply attempt to fill black holes known as Fanny...
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US Treasury Department Recommendation: Economic growth must be lifted slightly (but not too much) to validate bank balance sheet solvencyWhat a pleasant surprise to read an interview with President Obama this weekend which contained the following:What I think will change, what I think was an aberration, was a situation where corporate profits in the...
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The biggest shocker this week came in Thursday night’s H41. Fed credit outstanding virtually collapsed with reductions in alphabet soup programs outpacing direct Fed purchase of securities by nearly 8 to 1. The biggest reductions were in the major programs, TAF, CPR, PDCF, and currency swaps with FCBs. Banks’ deposits at the Fed were...
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AIG Venture Capitalism You have two cows. You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows. The...
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While the Fed’s balance sheet ballooned this week thanks to massive settlements of MBS paper, the Primary Dealers may have been mostly sidestepped in the process. Click here to download complete report in pdf format (Professional Edition Subscribers). Try the Professional Edition risk free for thirty days. If, within that time, you...
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The Fed did not expand its balance sheet again this week. Fed credit dropped by $1.8 billion. However, Fed credit funneled through the Primary Dealers rose by a couple billion and the Treasury let the market off the hook by only settling $1 billion in new debt. That set the stage for this week’s...
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What’s the Fed doing to try to prop the markets? Nothing (Not a typo). Ben and the gang actually cut the Fed’s balance sheet this week. I have to wonder if it’s a matter of reluctance on their part or reluctance on the part of those who would be the recipient of the Fed’s...
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The Fed only slightly increased the size of the Fed’s balance sheet this week as MBS and GSE holdings increased while Alphabet Soup programs declined slightly. This small net addition in the Fed’s balance sheet was not nearly enough to halt the continuing meltdown in the stock market and Treasury market. Click...
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The Fed finally began to try to counter the implosion of the financial system with a big buildup in its balance sheet this week following two months of shrinkage. Most of the growth came from an increase in TAF and the beginnings of settlements of the previously committed MBS purchases. The big question is...
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Crushed under the weight of $48 billion in new Treasury supply, the markets were under pressure again today, including the bond market, where Treasuries erased the effects of Tuesday’s buying panic. Supply will tend to do that, and next week it will only get worse as it looks like the supply wave will build...
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The Fed’s balance sheet shrunk again this week. That makes 8 weeks during which time the Fed’s balance sheet has been shrinking. Apparently this is in preparation for eventually putting all those MBS it’s buying on the books. While the Fed is talking a good game about buying $600 billion in MBS securities, and...
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This week’s Fed H41 showed that the Fed’s balance sheet collapse continued. Fed credit has now been down 7 weeks in a row, and the numbers aren’t small. The bulk of the plunge has been in currency swaps with foreign central banks, but other programs were down as well. The Fed issued new terms...
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The Fed released its H41 balance sheet report, money supply, commercial paper, and primary dealer data on Thursday and the MBAA released its mortgage applications data. The Fed shrunk its balance sheet for the 5th week in a row in spite of big increases in TAF and CPR. Meanwhile, FCBs continued to binge...
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The Treasury paid down debt this week. Partly as a result of that, the indirect bid at the auctions was huge, signaling that foreign central banks continue to buy Treasuries at a breakneck pace. Meanwhile, spreads between GSE paper and Treasuries continued to widen at the same time as Treasury yields headed sharply higher....
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The Fed shrank its balance sheet this week. When they do it once it’s one thing, but when the number is downtrending over 4 weeks it’s time to sit up and take notice. The Fed is apparently having a problem forcing credit into the system. It’s also playing another little noticed game that has...
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The Fed’s balance sheet shrank dramatically this week as banks paid off TAF loans and reduced their deposit accounts at the Fed on which they are no longer earning any interest. When the Fed cut the interest rate it paid on reserves I warned our subscribers that this would be the result. I expect...
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The Fed shrank its balance sheet by $125 billion this week. How ya like dem apples! I will go through the H41 line by line and have a complete analysis in the next Professional Edition Fed Report to be posted either tonight or tomorrow AM. Try the Professional Edition risk free for thirty days....
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This was the week the Fed threatened to balloon its balance sheet to whatever extent necessary to reflate the economy. In spite of all the histrionics when we drill down into the balance sheet the Fed seems yet again to be more form than substance. They may want to reflate, but as I examine...
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