DEVELOPING:
Draghi: Growth is expected to remain weak
Draghi: “governing council today decided on modalities for undertaking outright monetary transactions. OMTs. In secondary markets.”
DRAGHI SAYS GOVERNMENTS MUST BE READY TO ACTIVATE EFSF, ESM
DRAGHI SAYS ECB TOOK DECISION ON COLLATERAL
ECB CUTS 2012 GDP FORECAST TO -0.4% FROM -0.1%
Draghi: ECB inflation forecast 2012 2.4-2.6% 2013 1.3-2.5%, higher than June forecast
DRAGHI SAYS IMPORTANT FOR BANKS TO BOOST RESILIENCE IF NEEDED.
Draghi : ECB can undertake outright [...]
Earlier we heard Goldman’s talk down of Draghi’s comments, which we will not tire of saying, wereabsolutely nothing new. Now here is Citi’s Jurgen Michel throwing cold water in the face of all those who believe that the ECB (which can’t really do more LTROs unless it is willing to accept Zynga’s virtual farms as collateral) will save the day with more direct intervention. To wit: “in our view, such [...]
Mark Dow
Behavioral Macro
A quick comment on China’s RRR cuts: The underlying mechanics of Chinese RRR cuts and their implications for the country’s monetary policy stance still seem to be misunderstood.
A Chinese RRR cut is NOT like a rate cut in the developed world. And it does not necessarily signify an easing of the monetary policy stance. If you want to understand whether China is increasing or decreasing accommodation you only need [...]
Raw data, 5th column is the facility usage in Mio:
Date,Open Market Operations (excl. Securities Markets Programme),Marginal lending facility,Deposit facility,Net liquidity effect fro
m Autonomous factors and Securities Markets Programme,Current accounts,Reserve requirements,Covered bond purchase programme
01/06/2010,843486,24,316405,328564,198541,211269,55131
02/06/2010,846898,9,320367,327515,199025,211269,55331
03/06/2010,846982,315,299471,331853,215973,211269,55416
04/06/2010,847381,9,350903,325162,171325,211269,55848
05/06/2010,847381,9,350903,325162,171325,211269,55848
06/06/2010,847381,9,350903,325162,171325,211269,55848
07/06/2010,847528,8,361692,319684,166160,211269,55995
08/06/2010,847695,29,364587,328398,154739,211269,56162
09/06/2010,846693,1327,368978,331212,147830,211269,56347
10/06/2010,845164,735,365904,329073,150922,211269,56547
11/06/2010,845330,367,384260,323633,137804,211269,56713
12/06/2010,845330,367,384260,323633,137804,211269,56713
13/06/2010,845330,367,384260,323633,137804,211269,56713
14/06/2010,845495,50,381220,323692,140633,211269,56878
15/06/2010,482608,679,77168,317971,88148,211269,57467
16/06/2010,855756,30,200733,316038,339015,213000,57883
17/06/2010,856086,11,213085,318151,324861,213000,58213
18/06/2010,856454,11,232045,328737,295683,213000,58581
19/06/2010,856454,11,232045,328737,295683,213000,58581
20/06/2010,856454,11,232045,328737,295683,213000,58581
21/06/2010,856895,1517,226129,341612,290671,213000,59024
22/06/2010,857154,11,213562,344205,299398,213000,59283
23/06/2010,878130,0,214254,355349,308527,213000,59398
24/06/2010,878416,1,250019,356084,272314,213000,59684
25/06/2010,878604,565,284357,349749,245063,213000,59872
26/06/2010,878604,565,284357,349749,245063,213000,59872
27/06/2010,878604,565,284357,349749,245063,213000,59872
28/06/2010,878953,540,304444,348565,226484,213000,60205
29/06/2010,879234,429,302228,339488,237947,213000,60486
30/06/2010,910450,27,309106,349046,252325,213000,61144
Source: http://www.ecb.int/stats/pdf/monetary/lm/liq_daily_2010.zip
SocGen explains why the €490 billion LTRO number is misleading and why, net of rolls, the actual new liquidity is about 60% lower. In other news, don’t forget to add €210 billion in net “assets” to the ECB’s already record balance sheet of €2.494 trillion, bringing it to a fresh new record of €2.7 trillion, or $3.5 trillion. At what point will the market start asking questions of the world’s [...]
The Fed was hit with withdrawals of $83.3 billion last Wednesday, the largest withdrawals from its deposit accounts that were not associated with quarterly tax payments since February of 2009. $7 billion of that was the net cash transferred to the US Treasury from its note and bond sales less outlays. The Fed still had to meet the other $76 billion. These transactions were revealed in the Fed’s weekly H.4.1 [...]
by The Contrary Investor
A View From The Corner Office(s)
We are all quite aware of the fact that heightened volatility has become a short term norm in the financial markets as of late. Not surprisingly, we’re seeing the same thing in a number of recent economic surveys. The most current poster child example being the Philly Fed survey that has shown us historic month over month whipsaw movement over the last few [...]
by ZH
It was fun while the Liesman rumormill lasted:
Italy CDS +12 bps to 460
Spain CDS + 8 bps to 375
Portugal CDS + 10 bps to 1,110
Ireland CDS + 18 bps to 736
Greece CDS: Many points upfront but running joke
The Euribor-OIS spread also enjoyed the three day respite and is now back in widening mode, up to 81, after three days of declines, and on its way back to [...]
The Fed’s Twisted Plan
Adapted from Stock World Weekly: Count Down To Zero
While world markets sell off, and President Obama and Congress wrangle over some form of job-creating legislation, the Federal Reserve is busy with its own problems as it attempts to deal with stubbornly high and persistent unemployment. Expectations for additional quantitative easing (QE) are running very high, but there is the possibility that the [...]
Senate Republicans blocked a Democratic Bill to End tax Breaks for Moving U.S. Jobs Offshore! http://goo.gl/6qhnK
Republican committee voted for a 18-month delay of regulations to reduce risk in OTC Derivatives. http://goo.gl/4IYGP
Republican Senate Campaign Contribution Monies from Government Military Contractors with Free Speech Argument http://goo.gl/35V9l
Secret Hold On Whistleblower Protection Narrowed Down To Two Senators http://goo.gl/INklc
UBS Whistle Blower in Jail for helping the IRS with over 2,000 Tax Dodgers! http://goo.gl/s8JYp
‘Austrian tax evasion [...]
Credit Suisse Group AG (CS), Goldman Sachs Group Inc. (GS) and Royal Bank of Scotland Group Plc (RBS) each borrowed at least $30 billion in 2008 from a Federal Reserve emergency lending program whose details weren’t revealed to shareholders, members of Congress or the public.
The $80 billion initiative, called single-tranche open- market operations, or ST OMO, made 28-day loans from March through December 2008, a period in which confidence in [...]
Supreme Court orders California to release prisoners
“”Today the court affirms what is perhaps the most radical injunction issued by a court in our nation’s history, an order requiring California to release the staggering number of 46,000 convicted felons,” Justice Antonin Scalia declared.”
“Last month, Gov. Jerry Brown signed A.B. 109, which shifts to counties the responsibility for incarcerating many low-risk inmates. Up to 30,000 state prison [...]
by ZH
As Business China reports, “the central bank scheduled the auction of RMB 20 billion worth of one-year treasury bonds and RMB 10 billion in six-month bonds on the country’s interbank bond market for May 13. But banks, faced with tight liquidity, only purchased RMB 11.71 billion worth of one-year bonds and RMB 9.63 billion worth of six-month bonds, the report said.” In other [...]
IMPEACH BERNANKE!
An open letter to Congressman Ron Paul of Texas
TEXT OF LETTER:
Antal E. Fekete
April 6, 2011
Dear Dr. Paul:
There are serious questions about the legality of Quantitative Easing. You are among the few who are well-qualified and well-placed to get to the bottom of it.
Most people believe, and the media confirm them in that belief, that the Fed can legally create dollars ‘out of the thin air’ [...]
by Charles Hugh Smith from Of Two Minds
You Want Inflation? Here’s How To Get It
Rising prices driven by speculation is not the same as organic inflation, and diverting national income to the banks will not create organic inflation.
The Federal Reserve’s stated goal is to create modest inflation. Unfortunately they don’t grasp the difference between speculative inflation and organic inflation. The Fed’s official goals [...]
From Eugene Linden of Minyanville
The “Matrix” Market: Effects of Quantitative Easing, High Frequency Trading
A well-trodden meme of TV and cinema has been the plot in which someone or something uses tantalizing illusions to sap humans of their will to resist while simultaneously pursuing hostile ends. In The Martian Chronicles, the subtle race of Martians distracted the invading Americans with irresistible life-like illusions that spoke to [...]
By Lila York
Does the United States still have a stock market? Not really. In a real market, when there are more sellers than buyers, prices decline. And vice versa of course. That is called “price discovery”; or used to be. Since January of 2010 investors have withdrawn a net total of 81 billion dollars from U.S. stocks and funds, this week marking the 33rd [...]
The Market Studies LLC president told Bloomberg that U.S. stocks are within a week of “a significant market top†that is likely to precede a drop of at least 11 percent in the Standard & Poor’s 500 Index. “I’m pretty confident that in one to two weeks, the market will be in a descent,†said DeMark, founder and chief executive officer of Market Studies LLC. “It could be pretty [...]
by Ashvin Pandurangi, Simple Planet
The Fed, by it’s own admission, is an independent entity within the government “having both public purposes, and private aspects”. By “private aspects”, they mean the entire operation is wholly-owned by private member banks, who are paid dividends of 6% each year on their stock. Furthermore, the Fed’s decisions “do not have to be ratified by [...]
by Jan Paul
The following article is an effort to use those records to sort out some of what they have been doing.
quote:
By: Frank Hogelucht
a recent comment to one of my postings inspired me to dig in and check if – and to what extend – a tradable edge might be provided on (or before / thereafter) days where the FED conducts Permanent Open Market Operations (means [...]
by Jan Paul
quote
Up to now I have never been tracking the Permanent Open Market Operations (or “POMO”) activity of the FED (it wasn’t in my arsenal of seasonalities like the release dates of the Job Report and the Consumer Price Index, or the FED announcement sessions), but a recent comment to one of my postings inspired me to dig in and check if – and to what extend – a [...]
by Jan Paul
Permanent Open Market Operations
Purchases or sales of securities on an outright basis that add or drain reserves and change the size of the System Open Market Account (SOMA) portfolio are amongst the tools used by the Federal Reserve to implement monetary policy.
——————————-
are only one of many things going on that impact the markets and the low volume of buyers who are either ahead of the pack or very [...]
by EB
Below is a bit stale, but the manipulations are nonetheless pronounced.
Permanent Open Market Operations (POMO)
Up to now I have never been tracking the Permanent Open Market Operations (or “POMOâ€) activity of the FED (it wasn’t in my arsenal of seasonalities like the release dates of the Job Report and the Consumer Price Index, or the FED announcement sessions), but a recent comment to one of my [...]
by Zebra
NEW YORK (MarketWatch) 09/28/10 — The Federal Reserve Bank of New York purchased $550 million in Treasury Inflation Protected Securities on Tuesday, part of officials’ pledge to reinvest cash from maturing mortgage-backed securities and housing agency debt back into the bond market to support the economic recovery. Dealers offered to sell the Fed $6.821 billion in TIPS maturing from 2011 to 2040.
DON’T FIGHT THE FED !
Note the time of [...]
by RockyRacoon
All QE2, All the Time
Why QE Doesn’t Work
By Ed Yardeni
BULLET POINTS: (1) Fed study buries textbook money multiplier. (2) The Treasury’s lap dog. (3) Kohn’s exit speech admits Fed is clueless. (4) In 1988, Bernanke questioned money multiplier model. (5) The fiscal multiplier is also baloney. (6) The administration’s stimulators are jumping ship. [...]
by mainersteve
The purchase or sale of Treasury securities on an outright basis adds or drains reserves available in the banking system. Such transactions are arranged on a routine basis to offset other changes in the Federal Reserve’s balance sheet in conjunction with efforts to maintain conditions in the market for reserves consistent with the federal funds target rate set by the Federal Open Market Committee (FOMC).
Operation 1 – RESULTS
Operation [...]
by Zebra
DON’T FIGHT THE FED !
Home > Markets > Open Market Operations
Tentative Outright Treasury Operation Schedule
Across all operations in the schedule listed below, the Desk plans to purchase approximately $27 billion. This is the amount of principal payments from agency debt and agency MBS expected to be received between mid-September and mid-October.
Operation Date1 Settlement Date Operation Type2 Maturity Range
September 15, 2010 September 16, 2010 Outright Treasury Coupon Purchase 9/30/2014 [...]
by Zebra
The retail buyer.
The equity market has failed to be a store of value for the large majority of retail buyers. They have left the market in droves, mostly by selling equity mutual fund shares, many never to return.
The fund managers have sold the rallies, and the rallies only exist because of mindless buying by the proxies of the Fed Permanent Open Market operations team as the Fed [...]
What is ‘Quantitative easing”?
Wikipedia:
The term quantitative easing (QE) describes a monetary policy used by central banks to increase the supply of money by increasing the excess reserves of the banking system. This policy is usually invoked when the normal methods to control the money supply have failed, i.e the bank interest rate, discount rate and/or interbank interest rate are either at, or close to, zero.
A central bank implements [...]
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