You're now on the archive server. Commenting has been disabled.
Bank Depository Reserves Hit 3 Month High As Banks Retrench And Consumers Save
In a surprising turn of credit "looseness", total seasonally adjusted depository reserves increased by $84 billion compared to two weeks ago, and are now at $856 billion, the highest level since the end of May. It appears that contrary to all rhetoric to the contrary, banks are still unable and/or unwilling to lend or otherwise dispose of the ever increasing duffel bags full of cash in the basement.
The overall Monetary Base has followed the depository reserves fluctuations dollar for dollars, indicating the pure currency in circulation has not fluctuated much if at all: a year ago the non-depository reserve monetary base was $800 billion and it has barely budged to its current level of $878 billion.
In essence, the Fed's plan to withdraw excess liquidity will have to wait at least until such time as consumers are again stupid enough to leverage themselves up, despite having reduced credit card limits and much more stringent banks. And the $84 billion increase in reserves is simply indicating that consumers are retrenching even more: expect the consumer saving rate to increase materially at the next data disclosure.
Source H.3
»
- 4019 reads
- Printer-friendly version
- Send to friend
Now look at them yo-yos thats the way you do it
You play the guitar on the mtv
That aint workin thats the way you do it
Money for nothin and chicks for free
Now that aint workin thats the way you do it
Lemme tell ya them guys aint dumb..
BOGNONBR:
http://research.stlouisfed.org/fred2/graph/?s[1][id]=BOGNONBR
No moving refrigerators or color TVs... So simple, so elegantly explains why I haven't seen Butch Suze and the Shelia Kid on the toob rolling the Non-Serta PSA.
Dude, that is deep. You just blew my mind. Shelia Kid from House Part 2, really?
China is flat so far in spite the rosy manufacturing numbers. The more you sugar coat up your numbers, the more sugarcoating it will take for markets to believe you. Eventually, your "white lies" will catch up and none of the sentiment based propaganda will work.
The question of the day, are we there yet?
Reminds me of the boy who cried wolf story. There is always possibility that governments will be successful in inflating yet another bubble, however it looks like the next time the SKYNET calls "wolf ~ green shot" the answer will be "THE GAME OVER" instead of yes sir.
Hopefully FED & Treasury will learn from Chinese PB experience not to push V recovery too far and at any cost.. (nah, fat chance.)
educate people on how the 401k system has been used to scam everybody since 1982!! folks still think market is undervalued!! What a joke..
America in total denial and high on Obium!!
Chaos..dont be too sure. We have become so fat dumb and happy that another 25 years of this hysteria cannot be ruled out. I am trading accordingly...haha
The banks need to give some of that money to me.
Tyler Tyler Tyler - it's not "consumer savings".... it's "cash on the sidelines DYING to get back in to the market". Stick with the script!
Perhaps he's hibernating for a few days. I was wondering about him myself earlier today.
I miss my Cheeky Bastard...what have you done with him??????...:>(
I didn't do anything with him! Maybe it's just his two days of sleep for this quarter. I do hope we hear from him soon or just know he's okay. He's one of the most prolific and astute commenters here. The one-liners crack me up as well, though I have to say when he goes off into "I do pure math in my sleep for fun" tangents and then writes them out, none of it makes sense to me but it's nice smarter folks are out there than me. How else would I learn anything?
Hmmm...he kinda disappeared about the time they put Ted 6 under...
Slavic or Italian women this time? He always seems to have a couple of choices that would, umm, distract him from commenting here.
It must have been a Croatian woman.
You obviously don't understand what is going on. Andrew Mellon's "liquidate liquidate liquidate," which is Obama's policy, and which was NOT repealed by West Coast Hotel v. Parrish, says that
1. private debt becomes social loss; and
2. banks do not lend.
Everything is going according to plan. We are in inning 1 of a triple-header deflationary spiral.
It's just that no one alive in America has ever experienced a deflationary spiral, but what's coming is massive unemployment. Caused in part by...no lending.
As I have said before, economic activity is declining. The moment the Federal Government sniffed that, it pulled in its horns. You would do the same if you were saddled with a ratrap full of Joe Sixpack rats like the United States. YOU want to provide for that cryptofascist scum? LET THEM STARVE.
Not to rain on anybody's absolutist philosophies and predictions, but please remember that Bernanke has parked $1 trillion in newly-printed money in bank reserve accounts (for the purpose of shoring up their account statements so the FDIC doesn't have to close them down, NOT for the purpose of stimulating lending). He has locked that money into place by paying the banks interest on the free money he loaned them. No bank anywhere ever is stupid enough to exchange guaranteed Fed interest payments for risky business/consumer loans at a time like this. If they start to get stupid, he can simply raise the amount of interest he pays to whatever is necessary to keep the funds locked up. Much more important, he can GUARANTEE that the the reserves will be loaned out by stopping those interest payments, or even charging interest. Neither deflation nor inflation has scared him enough (he is a very arrogant, overconfident guy, in case you haven't noticed) to go to either extreme (although by historical standards, he has already exceeded various norms), but DO NOT BE FOOLED - Ben can either pump unlimited money out to counter deflation (the Helicopter Syndrome) if he wants or suck it back in if starts to actually fear inflation (the Volcker Syndrome). All the hysteria aside, he has done neither so far, but the future...well, that's another story.
This is a really interesting chart Tyler. Queue Mish posting in 3.. 2.. 1..
Banks are insolvent, they can't lend.
Fractional reserve fiat systems have currency and hard assets. In a fractional reserve system based on gold there eventually becomes 10 claim tickets (dollars) for every physically claimable dollar of gold. In a fiat money system there's 10 dollars of hard assets for every dollar and about 20 of claim ticket (dollars). So the banks are flushed with claim tickets for facilitating fractional reserve notional value theft. This is the stealing (I mean merging portion) of the leveraged theft ( i mean downturn portion of the economic cycle).
Consumers do not leverage. They borrow. Leverage is when a hedge fund goes into everyones bank accounts and uses thier deposits to pretend they are out buying and selling stuff in the market without their permission and without giving them a piece of the profits.
When these things are going up they are made of teflon and you can't hitch you wagon to them at all for the purpose of getting gain. When they reach a bubble you find out that your wagon is already hitched to them and the financial vehicle isn't a porsche at all it's a truck made almost entirely of trailer hitches that won't let you go on the way down. You should see merger after merger after merger the next 2 weeks.
10:1 Its even that way with the Perth Mint that Schiff touts all the time. Only thing i dont like bout schiff is that the unallocated gold of the perth mint is a fractional reserve system. its increased for 2:1 to about 8:1 in the last 5 years or so. that runup is probably europac clients =\ thats me. but i keep gold in hand.
Well fractional reserve systems with fiat money work differently. The banks have to squirrel off the excess capital to hidden places so that when it comes time to crash the system they can come back in with all the hidden money and buy up stuff. We've been at about 40:1 leverage which means the banking system has squirreled away much more in it's underground caverns than is visible on the surface.
Try my simple calc:
This jives with estimates of "capital losses" for this crisis (whatever "capital" really is in a fractional-reserve system, I have my doubts...) that are being floated about of between $3 and $4 Trillion.
Herein lies the sticking point: So many have flooded the blogosphere with monetarist theory, wanting desperately to convince us that this reflation effort using newly printed "money-thingies" will not debase the currency, since the currency is only "tokens", and they're just replacing the lost credit from the system, and therefore it's OK to print new money, because it's just a transactional value not a store of value, and they haven't even begun to print enough to fill the hole of lost credit, blah blah blah. Shedlock is the worst of the lot in this regard, totally equating money and credit in his very carefully constructed definition of inflation and deflation.
Of course, any rational person knows you can't print value, unless you've been B schooled and had to answer "correctly" to pass the tests. Any rational person knows that attempting to print value has been done hundreds of times throughout history and has failed miserably each and every time. Any rational person knows that the mere existence of the newly printed money, once that existence is known, debases all the pre-existing currency. Any rational person knows that all protestations to the contrary are merely part of a massive propaganda effort to help us poor dumb rubes keep the faith in the printed tokens. For our own good, of course.
What the Fed is doing is a carefully constructed lie, aided and abetted by a massive PR campaign. As far as I am concerned, by backstopping tens of Trillions of USD-denominated debt and accounts, the Fed and Treasury have already created that "money". It exists. $500 Billion to backstop money market accounts? $500 Billion line of credit for the FDIC? Remember, this is not fractional-reserve lending they're talking about, this is supposed new "capital" that is promised. Where did they get this total of $20 Trillion in backstops?
It exists in your mind. Is it real? Then the currency is destroyed. Is it false? Then the accounts are really not safe at all as claimed. Which is it? Could they make good on all the backstops if they had to? What would happen if they tried?
Is it real?
The $800-odd Billion in excess reserves is a red herring, and a damned clever one at that.
Pretty good explanation. It's all in sleight of hand how the people do it. During the last one. They let a few people buy up gold at like 22 bucks ship it off to england confiscated the gold peg it at 35 an ounce and then the people shipped it back and sold it for 35 dollars. It'll be much more complicated this time in how the robbery takes place.
The system wants to do some kind of correction which just doesn't happen simply and easily and over time. It happens all at once and has to create the laws and rules and have them in place before finishing up the scam. But judging by how the government wants to be able to shut off internet, grab any data device it pleases etc etc. It's going to be some kind of severely convoluted scam involving people who if you haven't done your homework you can't get on the internet and google up the answers.
It's hard to know what the scam will be until it's presented to you. I probably won't be here. I'll be crushing peoples pelvis with a sledge hammer making sure they get message that "give a fvck" isn't going to be happening between them and me. After I shoot them in the crotch of course.
The FED is doing something with Bear Sterns corpse. Something illegal, immoral and deceitful. It'll have to wash itself in the masses money. Best to figure it out before they get finished.
Sorry, but you are so absolutely worng it's scary. The excess reserves are the whole story: as long as they are tied up (by the Fed interest payments), there will be no lending, no fractional anything, no velocity money, nothing. There will just be some "assets" listed on the accounts to keep the FDIC from closing the banks down. That is not a red herring, it is the single most important financial fact in the world. If those reserves are withdrawn, or if interest is charged on them instead of paid on them, you will see such a rapid and drastic change in global finance that every other piece of information about the global economy will be instantly obsolete. I pity the fools who don't get what is going on with the creation and manipulation of those reserves.
Not a big shoe,indirect bidders most probably Baltic via Sweden and other lenders.
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
Reserves show nicely that the same banks that were in the shit when the Global Gambling Ring went into a default cascade, are still in the shit. They'll remain there until Count Fedula sucks enough wealth out of humanity (via inflation) to take ownership of all the mind-bogglingly massive, default-cascade inducing, out-of-the-money derivatives positions and pay them out (via QE). No doubt the Count will take his pound of flesh from the banks in the process too, probably hidden behind the smoke-screen of government.
Count Fedula is in the middle of the biggest US land-grab since Columbus, and - hundreds of years later - the natives are equally oblivious to the fact and yes, this literally *is* a land-grab. Fedula is fast becoming (or already is) the single biggest holder of derivative positions and, unlike mere mortals, Fedula can just pay out a losing position with QE cash.
"I cannot lose! MWUHAHAHAHAHA"
In so doing, Fedula becomes the proud new owner of the underlying, paid for with wealth drawn from that tax on everyone known as inflation.
I call that a L A N D - G R A B.
This "recovery" is such a joke.
In fact this recovery scares me. It doesn't scare me in the sense of my portfolio but more in the sense of what will happen (or already has) to this country.
I don't think some immediate collapse will happen but the slow and methodical deconstruction of a once great and prosperous nation is just sad. I mean seriously, if you look at what has happened to this country over the last 10 years it is truly heartbreaking. All the foreign nations buying up our assets, marxism, racially/religiously/politically divided...ugh....
It's almost like witnessing your own death, or even worse, the death of someone close to you who acheived what the rest of the world never could but always wanted to.
I will listen...as the band plays on...
Buying up your assets? What makes you think that they are suppose to be yours! You LBO other countries assets, your bubble bursts, and you expect to keep them?
Same thing with human resources. Gear your profits, over-pay top salaries, and brain drain from other countries.
A lot of people here seem to understand that there will reversion to the norm. But that is in everything, not just corporate profit.
It's time to burst the fantasy bubble of the American identity.
the fed now permits banks to unilaterally sweep demand deposits into money market accounts (without notice or permission) so they can avoid paying fdic insurance and boost profits---inside tip
the fed now permits and encourages banks to transfer funds from demand deposit to money market funds without permission or notice to allow banks to avoid paying fdic fees--boost profits--and also boost reserves and help hard-hit money funds
The graph is interesting but the explanations are not. Massive increase last Summer
is likely associated with things like (1) forced maintenance of higher reserves (FED telling banks where the lines should be) (2) transfer of money from equity/bonds to bank deposites by customers.
There maybe other reasons, since consumers had little capacity to increase savings on a whim last Summer, and banks had little money to push into reserves.
How do you know which side of the trade Goldman is REALLY on these days?
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
Last summer, late July 2008, the Federal Reserve's H3 report (reserves - I think that's the right cite)) showed absolutely clearly that the banking system as a whole had positive reserves only to the extent that those reserves were BORROWED from the Fed, i.e., there were no real reserves, only pixelated transfusions of electronic cash created by keyboards. If you followed it back into 2007 and before, there were "real," non-Fed borrowed reserves. The situation has most definitely not changed.
Yes, but the good news is that the Fed has $84b more to conduct POMO buys. That is good thing, No? NOT!
more fraud and plundering of national wealth via fed and treasury
You believe the Fed's accounting?????
HA HA HA HA HA HA HA!!!!!!!!
the fed morphed itself into a corrupt RTC..
fed is only Obama's re-election slush fund
Welcome to the Banana Reublic of USA
Why loan other peoples money if you know the future value, even at 2:1 pay back, was crap?
The CNBC piece from Olick....it's just too funny that people are still "mystified" about what the banks are (not) doing with foreclosures. AS if it is even a debate.....
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
No matter how strange it sounds,but for some reason Elliot wave targets are working beautifly. Some of his follower(don't subscribe to his sight,but read some of his followers sights)has called for a market top around 1040 for wave 2. there are way too many 2 of threes and so on to follow,but the bottom line its been working since I guess he called a market top in 2007. But what if it continue working?dow around 1000?is it possible?unimaginable to me,but having been in the middle of it back in Nov,I say everything is possible.