A couple of minor technical problems called “business” and “life” have now intruded on my increasingly bogged down publication schedule that, in the interest...
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Posts Tagged ‘ Mbs ’
Mind Blowing Economic Charts – First Time Claims, The Stock Market, and The Fed
Improvement in first time unemployment claims is slowing. Actual, not seasonally manipulated data, including an adjustment for the usual weekly upward revision, shows that the year to year rate of change is on the cusp of a possible upside breakout, which would be good news for stock market bears if it happens. Here’s why...
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Cyclical Liquidity Flows Approach Inflection Point
The following is an excerpt from the Executive Summary of this week’s Professional Edition Fed Report. Subscribers can access the full report here. The composite liquidity indicator was virtually flat last week on a mixed performance in its components. The indicator has recently accelerated upward away from its 39 week moving average. With demand...
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Stigma, Who’da thunk
“You can make a firewall as high as you want and it will be no help” -Wolfgang Schäuble, new Eurogroup head, and German Finance Minister It was fun while it lasted but the bloom off the LTRO is now turning into, drum roll please, a liability. Funny how accounting that recognizes this concept works in...
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Not Merry Twistmas
Reposted from an email bulletin- I’m finally back up to speed after my trip back from my summer base in Canada to base camp FL. Yesterday I posted a Wall Street Examiner Professional Edition Fed Report update. This is an excerpt from that report. The Fed’s security holdings rose in the week ended 10/12/11...
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Happy Columbus Day Treasury Market
Foreign central bank dumping of Treasuries and Agencies continued this week, although not at the frenetic pace of the past two weeks. This activity may be beginning to take a toll on the Treasury market, where yields are showing signs of possibly having bottomed. Treasury supply was light with no net new supply settling...
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The Bank of America Settlement: The Latest Travesty in the U.S. Banking System
If there's one thing the recent Bank of America Corp. (NYSE: BAC) settlement proposal demonstrates, it's this: Calling the easy treatment that big banks have been enjoying in recent court and regulatory actions "a travesty of justice" is like calling the Grand Canyon a ditch.
In fact, the...
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Treasury Bonds Inflection Point Report: Profit As The Fed Crushes Bond Prices
The U.S. Federal Reserve only officially sets one interest rate, which is the "discount rate" at which a bank in trouble can borrow from the U.S. central bank. As the Fed itself states: "The discount rate is the interest rate charged to commercial banks and other depository institutions on loans they receive from their...
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How to Fix the U.S. Housing Market
If this week's economic reports showed us anything, it's the fact that two years into what's supposed to be an economic recovery, the U.S. housing market remains on life support.
But here's what those reports didn't tell you: If the housing market isn't fixed soon, it's going to drag...
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Gold & Silver Guy Makes His Case & A Rebuttal
Gold & Silver Guy Makes His Case & A Rebuttal
$10 Oil Follow Up – The case for Short Term Deflation
Maloney: "MBS are the big problem for the financial sector. MBS only speed up the global transmission of problems through the banking sector. It’s...
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Bank, FCB No Show Puts Fed in Panic – Professional Edition
The Fed’s program of money printing was designed to add $600 billion in Treasuries to the System Open Market Account (SOMA) while replacing the MBS that were being paid off from its balance sheet. Last summer’s refinancing boom had triggered a wave of MBS prepayments. When mortgage rates rose in November and December, refinancing...
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Standard English Translation- That’s What I Call A Racket
For the benefit of everybody who hated Now Dat’s What I Call a Racket, which is probably everyone not from Philly, Jersey, NYC or Lawn Giland, here’s a translation in something approximating standard English. Mea culpa! Total MBS on the Fed’s balance sheet fell by $15.2 billion last week; bringing the drop to $29...
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Now Dat’s What I Call A Racket
Advance excerpt from the next Professional Edition Fed Report Total MBS on the Fed’s balance sheet fell by $15.2 billion last week; bringing the drop to $29 billion over the past 3 weeks. Between July 14, when the first paydowns hit, and November 3, MBS paydowns totaled $111 billion, equivalent to a monthly rate...
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The End of As Good As It Gets- Professional Edition
The Fed has bought $45 billion of Treasuries in the first two months of QL1.5, including $7.3 billion last week. It’s been good for 80 points on the S&P 500, 650 on the Dow, and a 35 basis point decline in the 10 year yield. With QL1.5 working as well as it is I...
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Fed Buys Another $2 Billion in Treasuries
We don't need no effin' QE2. The more they buy, the more they force Treasury yields down and the more people will refi and the more MBS will get prepaid which will require the Fed to buy more Treasuries and the more they buy, the more they force Treasu...
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Liquidity Crisis Approaches
The Fed’s balance sheet took a big jump last week as settlements of forward MBS purchases more than offset reductions in the alphabet soup programs being shut down as well as the little noticed roll off of some maturing GSE paper. GSE maturities totaling $29 billion over the next year will play a small...
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Pale Around the Gills
Sprott Securities has a piece out questioning how the US Treasury is funding its monster debt offerings. They question one category called “other investors”, which is clearly another vague and pointless disclosure now all too typical. Personally I think the Fed has orchestrated some purchases of toxic MBS and agencies in exchange for a...
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Ben’s Little Game – Professional Edition Fed Report
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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Show Me The Frickin Money- Professional Edition
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 $71 Billion Prop Job – Professional Edition
$71 billion will buy a lot of paper, and there’s more to come, as the Fed has scheduled 2 more Treasury permanent purchases this week. That’s on top of $56 billion in Treasury paydowns that will settle this week, and billions more in MBS purchases that are scheduled for settlement over the remainder of...
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What Caused The Rally – Professional Edition Fed Report
We now know the proximate cause of this week’s stock market rally. The Fed closed on the purchase of $167 billion of MBS in the week ended Wednesday. This is by far a record infusion of permanent cash into the financial system. For those of who were short the market, it would have been...
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Drop In The Bucket- Professional Edition Fed Report
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 here to...
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The Final Backstop- None- Professional Edition
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 on...
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Treasury Pays Down, FCBs Buy, Fed Drains – Professional Edition
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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Hey! Where’s My $10 Billion! Professional Edition Fed Report
That question arose from the fact that that amount disappeared from the Fed’s balance sheet last week in the line items covering loans to and equity investments in the broken AIG. The Fed’s balance sheet as it pertains to custodial accounts for FCBs also makes clear why the Fed was forced to announce yesterday...
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