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 ‘ Subsidy ’
Foreign Central Banks Have Left the Building
Tracking foreign central bank (FCB) holdings of US Treasury and Agency (Fannie, Freddie, and minor government agencies) paper has been one of the most important lines of inquiry in my analysis of market liquidity for the past 9 years. This information is available virtually in real time each week in the Fed’s weekly H41...
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The Causes Of The Mess We’re In
What got us here?
What policies were implemented—decisions made—actions taken—which would set us on such a path to oblivion? Because that is our ultimate destination—oblivion. It’s coming to the American economy—and American society—a...
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China- A Profiteers Bagunca (Mess)
For those of you who don’t remember the Hunt Brothers, here is the background. Fast forward to today, and we see a “mystery holder” of copper stocks at the LME. Let’s see: a massive manipulation at the same time China is blowing up, could get very interesting. Just a thought, but does anybody care to wager...
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The Bad, The Ugly, and The Uglier- Professional Edition Fed Report
Tax receipts collapsed at an annual rate of 18% in October, which is far worse than I had feared based on our tracking of the daily data. At the same time, mortgage purchase applications collapsed last week, signaling the tailspin we expected as the first time home suckers panic subsided. The extension of this...
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How’d They DO That? – Professional Edition Fed Report
The Treasury market laughed in the face of having to pay for $55 billion of new intermediate and long term paper on Tuesday 9/15. That combined with the reduction in the Fed’s subsidy of this market, due to end on October 31, should have hurt the market, but instead there was a buying panic....
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Fed Report Update
The Treasury sold 13 week and 26 week bills and 3 year notes on Tuesday, and announced the 4 week bill to be auctioned Wednesday. Bid/cover ratios were high but lower than last week’s hysterical panic levels at the bill auctions. One week does not a reversal make, but a trend of reduced bid/covers...
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Fed Begins Cutback, Treasury Market Rocked – Professional Edition
The Treasury announced next week’s auction schedule on Thursday. The combination of big new supply in the intermediate and longer maturities, along with the market’s awareness that the Fed will be gradually cutting back and ending its longer term Treasury purchase program over the next 7 weeks, rocked the Treasury market on Friday. The...
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Much Ado About Reserve Growth
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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Dire Straits
The 1st half report from the PBGC illustrates in spades the fallout from Weekend at Bennie’s low interest rate subsidy, I mean stimulus. Seems pensions are losing billions, not from investment losses so far in 2009, but from the lack of interest income. Whodathunk.
The increase in the PBGCâs deficit is driven primarily...
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Mr. Bernanke, Tear Down This Ponzi Scheme – Professional Edition
FCBs dumped a massive amount of GSE paper this week, continuing a 10 week string of panic selling during which they have unloaded $148 billion of their GSE holdings. I had long warned that if the FCBs ever ended their subsidy of the US mortgage market, the financial system would collapse. When we look...
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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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Looming Inflation a Matter of Fact, or Faith?
I got this question this morning from a poster over on the Stool Pigeons Wire. Am I correct in stating that regardless of whether or not the new reserves that will be added once the FED purchases the GSE/MBS paper are utilized to increase fractional-reserve lending (at least initially), there would still be substantial...
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Fed Puts US in the Breach, Again – Professional Edition
Today I got sick to my stomach when the Fed announced two more alphabet soup du jour programs. One program will involve the direct purchase of GSE and MBS paper by the Fed. that’s another $600 billion that the Fed will add to its books. This action was necessitated by the ending of the...
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