Tag Archive for Subsidy

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 subsidy…

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 could…

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 pundits…

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% above…