@cohodk said:
The Fed just needs to stop paying interest on excess reserves.
Why would they want to do that? The privately owned (by the banks) FED is simply the banks that receive the interest (and the QE4ever). Having a central bank in private hands is no different than having a government in private hands.
Having a central bank owned by private bankers might have sounded good on paper in 1913, but time has proven that lie to be completely one sided. Time to re-visit the need for a privately owned central bank that holds so much financial power over the public and provides an open checkbook to those spending other people's money.
Those that provide/facilitate funding for a government indirectly control that government.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@cohodk said:
What exactly is your complaint pertaining to the last 100 years and how is the Fed to blame?
Having a central bank owned by private bankers might have sounded good on paper in 1913, but time has proven that lie to be completely one sided. Time to re-visit the need for a privately owned central bank that holds so much financial power over the public and provides an open checkbook to those spending other people's money.
Those that provide/facilitate funding for a government indirectly control that government.
As usual, a picture is worth a thousand words. Bonus question, "guess what year the Federal Reserve Bank was founded."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
54K manufacturing workers were added in November, the most in over two decades, or since 1998, as a result of about 41K GM striking workers returning to their jobs. I guess a "13K actual new manufacturing jobs" doesn't sound as romantic.
Just out of curiosity, I wonder if those 41K jobs were removed from the gov's employment numbers when they went on strike. Probably not.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@cohodk said:
What exactly is your complaint pertaining to the last 100 years and how is the Fed to blame?
Having a central bank owned by private bankers might have sounded good on paper in 1913, but time has proven that lie to be completely one sided. Time to re-visit the need for a privately owned central bank that holds so much financial power over the public and provides an open checkbook to those spending other people's money.
Those that provide/facilitate funding for a government indirectly control that government.
As usual, a picture is worth a thousand words:
compare your charts to reality...i/e lets show one for average household income for the same time frame.
"Bongo drive 1984 Lincoln that looks like old coin dug from ground."
compare your charts to reality...i/e lets show one for average household income for the same time frame.
The reality is that income has to rise as the dollar loses its purchasing power. How else could workers survive inflation?
The easily answered question is "which one caused the other?" It's a no brainer: A rise in incomes follows a rise in inflation and usually after a hard battle by the workforce.
If there were no inflation and costs remained constant there would be no rise in income; there would be no justification nor cries from the workers for it.
So, the monetary policymakers have a fix: Just keep adding zeros to everything and the system will run fine. . .
. . . until you run out of zeros:
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
"We should be happier to have a job than to have our savings protected … I think that it is in this spirit that monetary policy has been decided by my predecessors and I think they made quite a beneficial choice." --- new head of the European Central Bank
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
It all comes down to this:
Who is buying all the newly-issued US Treasury Bonds ?
It used to be Japan and then China et al.
But now the FED's Primary Dealers are being stuck with a lot of them.
That is where all the market liquidity has gone.
The requirement to buy the Treasury Bonds has drained the banks of liquidity.
So now the FED is loaning money to those banks using the Treasury Bonds as collateral.
I wish I could buy my own debt with more debt indefinitely. Sounds a lot like a legal Ponzi.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
"Overall, 45% of U.S. banks with more than $100 billion in assets received a supervisory rating of “less than satisfactory.” Tellingly, the Federal Reserve report does not say which banks have these less-than-satisfactory ratings."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@cohodk said:
A rating on supervision should not be confused with a rating on stability.
What is the amount of total assets in these "unsatisfactorily supervised" banks?
As we all know, its tough to find good and qualified help these days.
banks seem to have no problem finding a qualified apologist.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
"the Federal Reserve was suddenly facing a constellation of multiple LTCM blow-ups that could have started an avalanche that would have resulted in trillions of assets being forcefully liquidated as a tsunami of margin calls hit the hedge funds world."
"High demand for secured (repo) funding from non-financial institutions, such as hedge funds heavily engaged in leveraging up relative value trades," was a key factor behind the chaos, said Claudio Borio, head of the monetary and economic department at the BIS."
"... and the world may find just how broken it is as soon as December 31, when the next repocalypse event is tentatively scheduled to strike. The big question is whether the world's mega hedge funds, the Millenniums, the Citadels, the Point72s, afraid they will lose access to the precious repo funding that permits them to lever up as much as 10x, will sharply deleverage ahead of this event, in the process sending risk prices tumbling and precipitating the next market crash."
And our financial system is not as fragile as a basket of eggs? Got TVIX?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@cohodk said:
Until we care about trillion $$$ deficits expect the beatings to continue.
That is why I pay my taxes now and contribute as much money to my Roth 401(k) (or do a backdoor roth conversion)whenever possible. Interest payments on the 22 Trillion+ will force taxes to go up in the future and I don't see any end in sight. My generations future has been mortgaged by politicians and voters who can't make tough decisions and we will have to pay the price.
On another note, below is an interesting CNBC article based on information from "an unnamed Credit Suisse analyst":
And this will be driven by hedge funds cashing in stocks to recover liquidity as i discussed a couple of posts earlier.
This is the next black swan event.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
So basically, the architect of modern repo policy while at the FED, is saying that recent and current liquidity problems (shortage of cash) in the repo market (aptly referred to as "repocalypse)," is a direct result of the largest banks (led by JPM) converting cash reserves into US treasuries in order to sell them to the FED at a nice profit (front running) during the coming round of QE. Looks like the banks know QE is just around the corner and have figured out yet another way to profit from it. Bet JPM's 'Director of Creativity' is one well paid individual.
Of course these same greedy bankers could care less that their move out of liquidity is about to cause major hedge funds to liquidate, in mass amounts, stock holdings to maintain needed liquidity. Not only are the banks behind the largest ever run-up in stock prices, they are about to be the cause of one of the largest declines on record.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
The fed has been good to me, up up and up. Only mistake is I wish I would have been buying more dividend producing stocks instead of gold to stick under me pillow. Regards!
So if they sell them back then where is the decrease in liquidity?
liquidity is not a "net" position. It is a constantly changing current position. When one has converted cash to an asset he is currently shorter on liquidity. Now, and not next week, can make all the difference in the world, especially when it comes to a cash position. You should also know that.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
FED Will Flood Market With Gargantuan $500 Billion In Liquidity To Avoid Year-End Repo Crisis
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
So the banks have excess cash, but no liquidity? They are buying bonds to reap profits, yet bond prices have dropped over the last 3 months? The Fed is buying bonds from the banks, but the banks have no cash?
Can you see why we are having trouble following your line of thought?
Per the BIS (the central bank of central banks) the FED is providing liquidity to banks so that banks, in turn, can provide the hedge funds funding to maintain their leverage in the stock market. The FED is worried that the hedge funds will sell assets if liquidity is not available. Instead of forcing hedge funds to deal with a funding risk that they should know about, they are affectively bailing them out from having to liquidate their holdings.
Appears the FED is suddenly spending hundreds of billions to keep the stock market propped up. Do they have enough billions to get them to the election?
If this $500 billion madness is needed just to get to January 14, what madness will be needed come January 15?
No doubt now, the FED is in a panic. How long before investors follow suit? Got TVIX?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I think many of us would actually like a little panic though.
Panic or not, why does this obscure financial market need $60 billion/month indefinitely and a massive $500 billion infusion by January 14th - when it never needed this before?
Repo market? Nobody in flyover country ever even heard of this until now.
Seems like an awful lot of new imaginary free money at the drop of a hat - just to paper over a bunch of hedge fund and bank malfeasance.
Doesn't it? cohodk? Baley? Please explain, since I have no good answer for this new "initiative". I couldn't think of a better word than initiative without becoming real cynical.
Only for the privileged few, obviously.
Q: Are You Printing Money? Bernanke: Not Literally
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@jmski52 said: I think many of us would actually like a little panic though.
Panic or not, why does this obscure financial market need $60 billion/month indefinitely and a massive $500 billion infusion by January 14th - when it never needed this before?
Repo market? Nobody in flyover country ever even heard of this until now.
Seems like an awful lot of new imaginary free money at the drop of a hat - just to paper over a bunch of hedge fund and bank malfeasance.
Doesn't it? cohodk? Baley? Please explain, since I have no good answer for this new "initiative". I couldn't think of a better word than initiative without becoming real cynical.
Only for the privileged few, obviously.
Sorry, no clue from me, this subject is not really on my panic radar.
Thanks for keeping it on yours and telling us these numbers.
Y'all's concern makes me want to..
Balnce my asset allocation.
Ok, that's already done.
Go gold and silver novelty collector items!
I own some! They are shiny and fun!
Comments
The Fed just needs to stop paying interest on excess reserves.
Knowledge is the enemy of fear
wondering the same thing.
Why would they want to do that? The privately owned (by the banks) FED is simply the banks that receive the interest (and the QE4ever). Having a central bank in private hands is no different than having a government in private hands.
Having a central bank owned by private bankers might have sounded good on paper in 1913, but time has proven that lie to be completely one sided. Time to re-visit the need for a privately owned central bank that holds so much financial power over the public and provides an open checkbook to those spending other people's money.
Those that provide/facilitate funding for a government indirectly control that government.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
What exactly is your complaint pertaining to the last 100 years and how is the Fed to blame?
Knowledge is the enemy of fear
Having a central bank owned by private bankers might have sounded good on paper in 1913, but time has proven that lie to be completely one sided. Time to re-visit the need for a privately owned central bank that holds so much financial power over the public and provides an open checkbook to those spending other people's money.
Those that provide/facilitate funding for a government indirectly control that government.
As usual, a picture is worth a thousand words. Bonus question, "guess what year the Federal Reserve Bank was founded."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Breaking News:
54K manufacturing workers were added in November, the most in over two decades, or since 1998, as a result of about 41K GM striking workers returning to their jobs. I guess a "13K actual new manufacturing jobs" doesn't sound as romantic.
Just out of curiosity, I wonder if those 41K jobs were removed from the gov's employment numbers when they went on strike. Probably not.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
.
compare your charts to reality...i/e lets show one for average household income for the same time frame.
The reality is that income has to rise as the dollar loses its purchasing power. How else could workers survive inflation?
The easily answered question is "which one caused the other?" It's a no brainer: A rise in incomes follows a rise in inflation and usually after a hard battle by the workforce.
If there were no inflation and costs remained constant there would be no rise in income; there would be no justification nor cries from the workers for it.
So, the monetary policymakers have a fix: Just keep adding zeros to everything and the system will run fine. . .
. . . until you run out of zeros:
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Latest "Not QE" report card
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
No panic here, this stock market is headed for Pluto baby! "Life's Good"
PS guess I can always melt that silver down and make a nice 200lb fishing boat anchor. lol
The whole worlds off its rocker, buy Gold™.
Hair on fire!
Due to compounded investment returns far ahead of inflation, put out fire by diving into warm ocean water or resort pool!
Liberty: Parent of Science & Industry
So you're complaining that an ounce of gold isnt worth $20 like it was in 1913?
Knowledge is the enemy of fear
Who's complaining? I have good Federal Reserve Bank insurance.
The FED (and all central banks) detests free markets Part 1
The FED detests free markets Part 2
"We should be happier to have a job than to have our savings protected … I think that it is in this spirit that monetary policy has been decided by my predecessors and I think they made quite a beneficial choice." --- new head of the European Central Bank
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
As has been said here many times by the boogyman;), negative rates gotta go and....they will. In fact, the bottom in rates has already been called.
.
However...free markets are not detested. We do all enjoy the fantastical hyperbole though.
Knowledge is the enemy of fear
It all comes down to this:
Who is buying all the newly-issued US Treasury Bonds ?
It used to be Japan and then China et al.
But now the FED's Primary Dealers are being stuck with a lot of them.
That is where all the market liquidity has gone.
The requirement to buy the Treasury Bonds has drained the banks of liquidity.
So now the FED is loaning money to those banks using the Treasury Bonds as collateral.
I wish I could buy my own debt with more debt indefinitely. Sounds a lot like a legal Ponzi.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Until we care about trillion $$$ deficits expect the beatings to continue.
Knowledge is the enemy of fear
The Fed Is on High Alert
"Overall, 45% of U.S. banks with more than $100 billion in assets received a supervisory rating of “less than satisfactory.” Tellingly, the Federal Reserve report does not say which banks have these less-than-satisfactory ratings."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
A rating on supervision should not be confused with a rating on stability.
What is the amount of total assets in these "unsatisfactorily supervised" banks?
As we all know, its tough to find good and qualified help these days.
Knowledge is the enemy of fear
banks seem to have no problem finding a qualified apologist.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
SPY to 10k Babae!
NQ 10k party at my place!
I LOVE The Fed!
BIS Offers A Stunning Explanation Of What Really Happened On Repocalypse Day. Are we now indirectly bailing out hedge funds?
"the Federal Reserve was suddenly facing a constellation of multiple LTCM blow-ups that could have started an avalanche that would have resulted in trillions of assets being forcefully liquidated as a tsunami of margin calls hit the hedge funds world."
"High demand for secured (repo) funding from non-financial institutions, such as hedge funds heavily engaged in leveraging up relative value trades," was a key factor behind the chaos, said Claudio Borio, head of the monetary and economic department at the BIS."
"... and the world may find just how broken it is as soon as December 31, when the next repocalypse event is tentatively scheduled to strike. The big question is whether the world's mega hedge funds, the Millenniums, the Citadels, the Point72s, afraid they will lose access to the precious repo funding that permits them to lever up as much as 10x, will sharply deleverage ahead of this event, in the process sending risk prices tumbling and precipitating the next market crash."
And our financial system is not as fragile as a basket of eggs? Got TVIX?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
fed already expecting the end of year pressure that happened before.
they will be doing the repo dance as they have been.
https://www.newyorkfed.org/markets/domestic-market-operations/monetary-policy-implementation/repo-reverse-repo-agreements/repurchase-agreement-operational-details
they have recently done some 42 day repos and had a 28 day repo today, along with several 14 day terms.
https://apps.newyorkfed.org/markets/autorates/temp
on the 28s:: 43 billion submitted, 25 billion accepted
That is why I pay my taxes now and contribute as much money to my Roth 401(k) (or do a backdoor roth conversion)whenever possible. Interest payments on the 22 Trillion+ will force taxes to go up in the future and I don't see any end in sight. My generations future has been mortgaged by politicians and voters who can't make tough decisions and we will have to pay the price.
On another note, below is an interesting CNBC article based on information from "an unnamed Credit Suisse analyst":
https://www.cnbc.com/2019/12/10/fed-qe4-could-happen-before-years-end-credit-suisse-says.html
And this will be driven by hedge funds cashing in stocks to recover liquidity as i discussed a couple of posts earlier.
This is the next black swan event.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Forgive me if this has already been posted, but...………...what do ya'll make of this?
https://www.zerohedge.com/markets/its-about-get-very-bad-repo-market-legend-predicts-market-crash-days
I knew it would happen.
Very good read.
So basically, the architect of modern repo policy while at the FED, is saying that recent and current liquidity problems (shortage of cash) in the repo market (aptly referred to as "repocalypse)," is a direct result of the largest banks (led by JPM) converting cash reserves into US treasuries in order to sell them to the FED at a nice profit (front running) during the coming round of QE. Looks like the banks know QE is just around the corner and have figured out yet another way to profit from it. Bet JPM's 'Director of Creativity' is one well paid individual.
Of course these same greedy bankers could care less that their move out of liquidity is about to cause major hedge funds to liquidate, in mass amounts, stock holdings to maintain needed liquidity. Not only are the banks behind the largest ever run-up in stock prices, they are about to be the cause of one of the largest declines on record.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Daisy
Chain
I knew it would happen.
bankers could care less that their move out of liquidity.
If they are selling treasuries back to the Fed, then how are they decreasing their liquidity?
direct result of the largest banks (led by JPM) converting cash reserves into US treasuries in order to sell them to the FED at a nice profit
Interest rates are up (prices down) since August so where do you get this "nice profit"?
Knowledge is the enemy of fear
they aren't selling treasuries back to the Fed, yet.
They decreased their liquidity buying them. You should know that it takes dollars to buy bonds.
and today the FED hints at bond purchases
Lucky guess on the part of JPM?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
The fed has been good to me, up up and up. Only mistake is I wish I would have been buying more dividend producing stocks instead of gold to stick under me pillow. Regards!
The whole worlds off its rocker, buy Gold™.
So if they sell them back then where is the decrease in liquidity?
Knowledge is the enemy of fear
liquidity is not a "net" position. It is a constantly changing current position. When one has converted cash to an asset he is currently shorter on liquidity. Now, and not next week, can make all the difference in the world, especially when it comes to a cash position. You should also know that.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Then from whom did the Fed buy $300 billion in Treasuries?
Knowledge is the enemy of fear
China?
Belgium?
JPM?
I knew it would happen.
FED is buying short term debt.
JPM is stockpiling long term debt as if they know the recession is already here.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
FED panic, Phase II
FED Will Flood Market With Gargantuan $500 Billion In Liquidity To Avoid Year-End Repo Crisis
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
"panic" is over over-the-top
So the banks have excess cash, but no liquidity? They are buying bonds to reap profits, yet bond prices have dropped over the last 3 months? The Fed is buying bonds from the banks, but the banks have no cash?
Can you see why we are having trouble following your line of thought?
Knowledge is the enemy of fear
The use of hyperbole turns off reasonable people and pushes independents and moderates toward the less lunatic view.
Liberty: Parent of Science & Industry
Wish the fed would start "panicing" on some PMs. Something needs to get my boat anchors out of the mud.
The whole worlds off its rocker, buy Gold™.
The use of hyperbole turns off reasonable people
$500 billion in a month...…………….kinda seems like a lot of money...………….....doesn't it?
The use of hyperbole turns off reasonable people and pushes independents and moderates toward the less lunatic view.
Hah! That's how I perceive about everything I read in the online "mainstream" media these days.
I knew it would happen.
Has the FED provided one third of a Trillion dollars since September just to keep leveraged hedge funds from crashing the stock market?
Per the BIS (the central bank of central banks) the FED is providing liquidity to banks so that banks, in turn, can provide the hedge funds funding to maintain their leverage in the stock market. The FED is worried that the hedge funds will sell assets if liquidity is not available. Instead of forcing hedge funds to deal with a funding risk that they should know about, they are affectively bailing them out from having to liquidate their holdings.
Appears the FED is suddenly spending hundreds of billions to keep the stock market propped up. Do they have enough billions to get them to the election?
If this $500 billion madness is needed just to get to January 14, what madness will be needed come January 15?
No doubt now, the FED is in a panic. How long before investors follow suit? Got TVIX?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Lol...pick a story already. Haha.
I think many of us would actually like a little panic though.
Knowledge is the enemy of fear
appears the bank’s liquidity issues may exceed the Fed’s ability to provide liquidity, and that isn’t good
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I think many of us would actually like a little panic though.
Panic or not, why does this obscure financial market need $60 billion/month indefinitely and a massive $500 billion infusion by January 14th - when it never needed this before?
Repo market? Nobody in flyover country ever even heard of this until now.
Seems like an awful lot of new imaginary free money at the drop of a hat - just to paper over a bunch of hedge fund and bank malfeasance.
Doesn't it? cohodk? Baley? Please explain, since I have no good answer for this new "initiative". I couldn't think of a better word than initiative without becoming real cynical.
Only for the privileged few, obviously.
I knew it would happen.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Sorry, no clue from me, this subject is not really on my panic radar.
Thanks for keeping it on yours and telling us these numbers.
Y'all's concern makes me want to..
Balnce my asset allocation.
Ok, that's already done.
Go gold and silver novelty collector items!
I own some! They are shiny and fun!
Liberty: Parent of Science & Industry
repos involve no money creation nor destruction. they are collateralized loans that get paid back quickly.