Government securities have become so scarce that it is driving down repo rates. A collateral shortage that has become so acute, money dealers won’t part with their stock of government securities no matter what the price. Stop me if you’ve heard this before. Except, we’re talking about Japan and JGB’s here rather than UST’s. The […]
The Fed bought $70 billion in Treasuries and $40 billion in MBS from Primary Dealers today. That’s a month’s worth of old QE in a…
Ok. I’m cheating. I have a secret weapon. My muse. Mella. She of the Big Short II fame. Like all of you we’ve been analyzing where this move may bottom or at […]
If the Fed has promised to print an unlimited supply of money, then why are inflation expectations at crisis lows and falling? At the same time, there are still-growing signs of illiquidity and an interbank crackup. Bazooka after bazooka, yet they don’t seem to be having much effect. That’s true domestically but more so offshore. […]
The New York Fed has released a set of Frequently Asked Questions to address programmatic inquiries about the facility.
OK, there’s a rally, but it’s not like the 2009 or 1974 bottoms.
Monetary policy can be implemented through outright purchases or sales of securities, which permanently changes the size of the Federal Reserve’s System Open Market Account (SOMA) portfolio.
The Fed scheduled $123 billion per day in Treasury and MBS purchases this week. That’s a month’s worth of old QE per day. What about unintended consequences?
There are three things the markets have going for them right now, and none of them have anything to do with the Federal Reserve. More and more conditions resemble the early thirties in that respect, meaning no respect for monetary powers. This isn’t to say we are repeating the Great Depression, only that the paths […]
On March 3, the Fed converted Not QE into Panic QE. Since then it has pumped $766 billion in cash into Primary Dealer accounts. At the same time the US Treasury issued “only” $147 billion in new debt. So in essence, the Fed issued $619 billion in excess cash.
Other than the hyperinflationary implications, what good has it done? What does it mean for us looking ahead.