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Fed Balance Sheet At New Record After $11 Billion Weeekly Increase In MBS/Agency Debt

Tyler Durden's picture




 

The Federal Reserve's balance sheet hit a new all time record of $2.2 Trillion in assets, after an $11 billion spike in MBS and Agency purchases week over week. 

  • Securities
    held outright: $1,785 billion (an increase of $92 billion MoM,
    resulting from $2 billion in new
    Treasury purchases, which have tapered off at $776.5 billion, $79 billion increase in MBS and $12 billion in
    Agency Debt), or a $11 billion increase sequentially. 
  • Net
    borrowings: $218 billion. Number for the November 25th week has not been updated.
  • Float,
    liquidity swaps, Maiden Lane and other assets: $195
    billion. The CPFF program was flat at $15.0 billion, a second weekly rebound from the all time low. FX liquidity swaps declined
    by $2.5 billion $26 billion,
    bringing these to another fresh 52 week low. Maiden Lane I
    and Maiden Lane II were at $26.4 and $15.8
    billion, while Tim Geithner's Goldman rescue package better known as
    Maiden Lane III came at $22.9 billion.

Foreign holdings declined by $7.5 billion to $2,925 billion.

 

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Fri, 11/27/2009 - 19:31 | 144478 . . .
. . .'s picture

Foreign holdings declined by $7.5 billion to $2,925 billion.

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Geithner will need a lot more intervention than this and Dubai to promote the dollar and the long-bond.

Sat, 11/28/2009 - 02:30 | 144667 Gordon_Gekko
Gordon_Gekko's picture

They are in the stage of "using buckets to rid the Titanic of water" right now.

Fri, 11/27/2009 - 20:07 | 144499 Brett in Manhattan
Brett in Manhattan's picture

If housing is really turning around, and we've been told by CNBC et al., why would the banks be falling over themselves to unload their MBSs?

Fri, 11/27/2009 - 20:55 | 144533 Mark Beck
Mark Beck's picture

One way to say this is the FHA/FED/GSEs are the residential real estate market in the US. Although the FED can also buy Commercial real estate SIVs.

I am really surprised that after all of the Treasury/FEDs actions through the GSEs and TARP, that the residential real estate market has not seen a greater price rebound. After all of their efforts, and now the extension of the housing credit + FHA underwriting, if prices start to trend downwards again, it will be an incredible blunder.

The banks like Wells Fargo are trying to unload their MBS through the GSEs as fast as they can, but it takes time. There is just too much overpriced paper.

Mon, 11/30/2009 - 08:54 | 146072 Anonymous
Anonymous's picture

You sound like a doubter and a Commie.

You should report yourself for immediatel re-education, citzen.

Fri, 11/27/2009 - 20:10 | 144506 Anonymous
Anonymous's picture

So after manipulating the economy and currency to create a failed state in which the FED (what?ten guys in suits) has most of the houses/property in the country in exchange for paper with green print. I feel like an american indian now!
Where is my whisky?

Sat, 11/28/2009 - 08:40 | 144720 Bob
Bob's picture

Patience, comrade.  The Victory Gin labs are ramping up to soothe our pain.

Sat, 11/28/2009 - 14:54 | 144885 WaterWings
WaterWings's picture

2 + 2 = 5!

Fri, 11/27/2009 - 20:11 | 144507 10044
10044's picture

now "that" is too big to fail....

Fri, 11/27/2009 - 21:02 | 144538 deadhead
deadhead's picture

these guys are phucking crazy.

that is all.

Fri, 11/27/2009 - 21:09 | 144540 Racer
Racer's picture

I have been watching DAX, FTSE, Nikkei etc for a long time and recently it seems like there is a sinister PPT like influence on the Dax and FTSE whilst leaving the Far East to their own falling indices devices.....

 

 

 

 

Fri, 11/27/2009 - 21:20 | 144544 Anonymous
Anonymous's picture

The Far East is being manipulated by capitalism.

Fri, 11/27/2009 - 22:39 | 144565 Anonymous
Anonymous's picture

Bernanke chimes-in on black friday or should I say threaten:

Audit would hurt economic prospects: Bernanke

WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke said on Friday congressional proposals to audit the Fed and strip it of regulatory powers as part of post-crisis reforms could damage prospects for economic and financial health in the future.

"These measures are very much out of step with the global consensus on the appropriate role of central banks, and they would seriously impair the prospects for economic and financial stability in the United States," Bernanke wrote in a column posted on the Washington Post's website.

The rare newspaper column by a Fed chairman comes shortly before Bernanke testifies before a Senate panel on his renomination to serve a second four-year term at the helm of the central bank and answers a series of steps on Capitol Hill that could diminish the central bank's role.

Lawmakers are angry with the Fed over its emergency bailouts of major financial firms and its failure to prevent the contagion of mortgage delinquencies that crashed the financial system. A proposal to audit the Fed's monetary policy deliberations won a committee vote recently over the objections of House Financial Services Committee Chairman Barney Frank.

Frank's Senate counterpart, Banking Committee Chairman Christopher Dodd, is himself the author of a proposal to consign the Fed solely to making decisions about setting benchmark interest rates.

Bernanke, in his column, conceded the Fed had missed some of the riskiest behavior in the lead up to the crisis. But he said the Fed had helped avoid an even more damaging economic meltdown and has stepped up its policing of the financial system.

"The Fed played a major part in arresting the crisis, and we should be seeking to preserve, not degrade, the institution's ability to foster financial stability and to promote economic recovery without inflation," he said.

Bernanke acknowledged that lawmakers are responding to public anger over the government's response to the turmoil.

"The Federal Reserve, like other regulators around the world, did not do all that it could have to constrain excessive risk-taking in the financial sector in the period leading up to the crisis," he said.

However, the central bank has moved "aggressively" to fix the problems, Bernanke said. The Fed's knowledge of complex financial institutions is invaluable in supervising them, he said.

The Fed's ability to slash interest rates to combat a recession without fueling inflation depends on its political independence he said. Allowing audits of its monetary policy -- as proposed legislation would do -- would increase the perceived influence of Congress on interest rate decisions, he said.

That, in turn "would undermine the confidence the public and the markets have in the Fed to act in the long-term economic interest of the nation," Bernanke wrote.

Frank has said the audit provision is likely to be revisited as legislation winds through both houses of Congress.

Dodd has said his proposal is a starting point for debate.

Sat, 11/28/2009 - 00:42 | 144627 Mark Beck
Mark Beck's picture

A little advice to Ben at his hearing. Ben please do not repeat this:

"The Fed played a major part in arresting the crisis, and we should be seeking to preserve, not degrade, the institution's ability to foster financial stability and to promote economic recovery without inflation," 

If you do, they will pick you apart on having you describe the crisis. Upon which, it will become crystal clear that the Federal Reserve failed in its role as systemic banking regulator in both creating BHCs and not regulating derivatives. 

If you try to convince the senators that you could possible control inflation, they will ask what is your plan for dumping all of the MBS and agency paper now on the balance sheet, and how you could possibly control future reserve lending, when you cannot effectively control bank credit now. 

Also, regarding:

That, in turn "would undermine the confidence the public and the markets have in the Fed to act in the long-term economic interest of the nation," Bernanke wrote.

Please Ben do not reference the equity markets in your discussion. Equities are not your concern or a focus of your organization, and you have higher mandated responsibilities like full employment. Perhaps the soundness of the currency may be of greater long-term interest to the nation than letting a few banks go out of business.

On second thought, don't talk at all.

Mark Beck

Sat, 11/28/2009 - 21:39 | 145115 Anonymous
Anonymous's picture

Mark, do you honestly believe that Congress can/will do anything that the Bernanke-loving financial industry does not pre-approve?

Fri, 11/27/2009 - 23:42 | 144591 SloSquez
SloSquez's picture

The "HFT Clamp", recognize it for what it is.

Fri, 11/27/2009 - 23:40 | 144590 SloSquez
Fri, 11/27/2009 - 23:47 | 144595 chancee
chancee's picture

Somewhere in New York Tim Seymour is lying passed out in his apartment next to an empty bottle of Cuervo after trying all day to get on TV and tell people that Dubai doesn't matter.  And that we're going higher.

Sat, 11/28/2009 - 00:14 | 144608 buzzsaw99
buzzsaw99's picture

Bernanke is certifiably insane.

Sat, 11/28/2009 - 01:31 | 144646 Glen
Glen's picture

$11 billion to prime the market with. Dubai? What Dubai? Did something happen? No effect on us!

Sat, 11/28/2009 - 03:10 | 144674 Anonymous
Anonymous's picture

where is the data source?

Sat, 11/28/2009 - 06:53 | 144705 Anonymous
Anonymous's picture

Excerpt from latest BB written as an opinion in the WP:"In order to push interest rates to near zero without igniting inflation fears in markets, Mr. Bernanke argued, investors had to believe the Fed was immune from political pressure. The House GAO audit proposal would "serve only to increase the perceived influence of Congress on monetary policy decisions, which would undermine the confidence the public and the markets have in the Fed to act in the long-term economic interest of the nation."Is he serious?.And does he honestly believe what he is saying,or this is one more of the veild threats against congress in case they choose to pass the bill?. What confidence he is talking about?is it the confidence reflected in the price of gold that keep on flying to the sky?. Or is it the confidence reflected in the price of oil that is a lot higher with probably half the economic activities globally than it was a couple of years ago?. So obviously,there is no confidence in his actions. But then again,isn't that what he wants the market to believe, that inflation is coming so people better be in the risky assets?. So why don't he stop beating the bushes about it,and come right forth with the real issue. Just say it bluntly BB"If you want to know how we are playing the game of luring people back into the stock market,then we will crash it and destroy your retirements". Not that it is not destroyed by now...

Sat, 11/28/2009 - 13:40 | 144850 Brett in Manhattan
Brett in Manhattan's picture

Nice little selective memory on Ben.

His argument is that the Fed needs to be independent in order to combat inflation, yet, he fails to mention that it was that same Fed that presided over two bubbles in the last ten years.

I'm reminded of this joke:

A couple goes to a Las Vegas casino. After his wife had lost a thousand dollars, the husband tells her to stop gambling.

The wife responds, "But, you're down three thousand dollars!"

To which, the husband replies, "Yeah, but I know how to gamble."

Sat, 11/28/2009 - 08:42 | 144721 Anonymous
Anonymous's picture

Hey that chart is hard to read. There are two scales, a right hand scale and a left hand scale. But there's no explanation of these.

Sat, 11/28/2009 - 11:39 | 144744 heatbarrier
heatbarrier's picture

Fed981, Have they cleared you into the ramp?......Fed981,Ground.

http://www.youtube.com/watch?v=HQETCmzCOFE

Sat, 11/28/2009 - 10:51 | 144768 Anonymous
Anonymous's picture

Label your axes on that chart.

Sat, 11/28/2009 - 11:36 | 144788 heatbarrier
heatbarrier's picture

Not sure what the right scale is. This is from the ClevelandFed.

http://www.clevelandfed.org/research/data/credit_easing/index.cfm

Sat, 11/28/2009 - 14:36 | 144881 trav777
trav777's picture

well, interest rates are not reflecting sovereign risk or QE.

I think that the fabled bondzilla has manifested in a shift in maturity lengths.  We need a barchart plot on what the total amounts outstanding are versus time-to-maturity for US sovereign debt.

Inflation risk or fear should show up in a stampede into maturities that can be unwound without "dumping."  Obviously, the holders of massive amounts of our debts do not want a freefall to crush their own currencies or holdings.  The first phase would be a buyer's strike which we've seen, then a move en masse into shorter and shorter maturities.  That way, there is far less sudden dislocation risk

Sat, 11/28/2009 - 15:23 | 144896 Anonymous
Anonymous's picture

China has a $1.5 trillion stimulus package to fund more excess productive capacity. The USA has a $2 tillion stimulus to hide toxic assets. $100 billion problem with Dubai debt is chump change that will disappear and then be used as evidence that the financial system is better than ever pushing equities to new YE highs.

Sat, 11/28/2009 - 16:00 | 144928 Anonymous
Anonymous's picture

Just want to thank those at Zero Hedge for great reading.
Tippecanoe and Durden too!

Sun, 11/29/2009 - 08:14 | 145295 Pondmaster
Pondmaster's picture

Not to worry Tyler ! New accounting shenanigans on the way and in the making . Triparty handlers of the Feds offloading of MBS trash into the nations Mutual Fund Money market funds will not have to hold their value ( little to none) on their balance sheets . re:http://www.reuters.com/article/governmentFilingsNews/idUSN25363811200911... or

http://tinyurl.com/ygqb6s4 -

Fed told rule change could help with exit -source - Reuters     I'm sure the "rule" would include an implicit guarantee of said MBS junk . What are these crooks up to now?
Sun, 11/29/2009 - 13:12 | 145390 cocoablini
cocoablini's picture

Just ask Al Greenspan about how well the FED did on derivatives and LTCM. He and Rubin fought derivative restrictions tooth and nail. The FED is littered with selective memory quotes from Greenspan and Bernanke. The rule of thumb is if thye broke it they should NOT fix it.

Sun, 11/29/2009 - 22:40 | 145766 andrew123
andrew123's picture

Tyler or Marla, is zerohedge in contact with any Senators on the Banking committee to prepare questions and followups for Ben's hearing?  I ahve asked this before, and appologize iof I missed the answer.  Zerohedge has stated that it wants to be a force for change, and I can't think of any better change than getting rid of Bernanke.

Mon, 11/30/2009 - 02:21 | 145945 Anonymous
Anonymous's picture

Value in the hands of government displaces independence. International boundaries present legal bonds. Opportunity rises with native defendants. God Bless the CPI.

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