Fed repos were down on Friday, but we are not out of the woods yet. Not by a long shot. Here’s why. And why it’s scary.
Fed repos outstanding from Temporary Open Market Operations (TOMO) hit a new record on Thursday, October 17. That, in just over a month since the program started, to fix a money market problem that was supposed to be a “one-off.”
One-off my ass.
The Fed started POMO today. But TOMO went up too. Stresses continue to build.
LIndsay Williams interviews Lee on Strictly Business. Recorded Tuesday, October 15. Click headline to hear the interview.
Wall Street and the Fed tell us there’s no crisis. Come on. Get real! They don’t pump $200 billion in cash into the market in a month, with a promise to do more for months to come, unless there’s a crisis.
The story of the Fed’s QE New is a day by day chronical of madness. I’ve written about it extensively even before it started. Here’s a list of those posts, with links to the full post. This archive begins with a couple of antecedents in August as the conditions flared up that led to the…
Call it what you will, the Fed has started the new QE. It’s coming fast and furious with POMO on top of TOMO that will grow the Fed’s balance sheet as fast as it did under old QE. It’s a sign that the house is on fire.
In the Fed’s daily overnight repo operations for October 4 it offered $75 billion in overnight repurchase agreements to Primary Dealers. The dealers took $38.55 billion at an interest rate of 1.8%, to fund the carry of their securities holdings. Here’s what this means.
Lindsay Williams asked me about today’s market break, and about Donald Trump. As usual, I did not hold back. Follow the money. Find the profits!Liquidity is money. Regardless of where in the world that money originates, eventually it flows to and through Wall Street. So if you want to know the direction of the next…
In today’s POMO, the Fed bought $1.6 billion in coupons, to offset shrinkage of its MBS portfolio in the normal process of mortgage prepayments.