This page has been archived and commenting is disabled.
Fed Claims It Did Not Manipulate Currencies In Q2
In a prepared report, the Fed announces "U.S. monetary authorities did not intervene in the foreign exchange markets during the quarter." That's great, now if only they could do the same for all non-Treasury, MBS, and Agency (we know they more than intervened there) asset classes, everything would be peachy.
This is how the Fed explains the FX activity in Q2:
Foreign exchange markets experienced considerable volatility during the quarter, but overall trading conditions were deemed orderly by market participants. The dollar appreciated against most G-10 currencies during the first two months of the quarter, as ongoing concerns about fiscal sustainability and the growth outlook in some euro-area peripheral countries weighed on sentiment toward riskier assets. In early June, however, the dollar began to depreciate against the euro following weaker-than-expected data releases in the United States in conjunction with moderately stronger-than-expected growth indicators in Europe. The stability of the euro may have been aided by a decline in the uncertainty that had accompanied several key risk events in the euro area and by the cumulative effect of a number of policy announcements by European officials.
And here is the Fed's justification for recommencing the liquidity swap lines:
Strains in short-term funding markets reemerged in Europe during the quarter, as concerns over fiscal deficits and growth prospects in peripheral European countries remained elevated. In response to these strains, the Federal Reserve reactivated U.S. dollar liquidity swap facilities with the Bank of England (BoE), the European Central Bank (ECB), the Swiss National Bank (SNB), the Bank of Japan (BoJ), and the Bank of Canada (BoC). The reactivation of these liquidity swap lines was designed to improve liquidity conditions in global money markets and to minimize the risk that strains abroad could spread to U.S. markets, by providing foreign central banks with the capacity to deliver U.S. dollar funding to institutions in their jurisdictions.
The Fed also notes the persistent rise in European overnight funding indices:
Also a result of bank funding strains, the implied dollar funding rate observed in foreign exchange swaps on major currencies rose more than the U.S. dollar Libor.
Um, what bank funding strains? Didn't the National Lampoons European Stress Test confirm all is well?
The Fed discloses it foreign reserves:
As of June 30, direct holdings of foreign government securities totaled $23 billion, split evenly between the Federal Reserve System Open Market Account and the U.S. Treasury Exchange Stabilization Fund. Foreign government securities held under repurchase agreements totaled $4.5 billion at the end of the quarter and were also split evenly between the two authorities.
All in all, nothing new here.
»
- 5218 reads
- Printer-friendly version
- Send to friend
- advertisements -
It depends on what the meaning of the word is is. - President William Clinton
And in other great, legendary lies... "i promise baby, i won't c-- in your mouth".
Ok, the truth is that if the Fed was found guilty of devaluating the US currency that is considered treason and punishable by death per the Founding Fathers of the United States of America documents.
Ben Bernanke: "Are we using my definition of manipulation or yours? Because it might make a difference and I would like to know before I answer."
Why am I suddenly reminded of this advertisement?
They may or may not have manipulated the currency market but they're busy giving everything else deep-tissue rub downs with happy endings.
From Ransquawk:
Moody's says US CMBS loan delinquencies up to 7.89%
So swap lines aren't 'intervening?
Or do they come under the heading, 'Just heppin' out a neighbor'?
AUD/JPY bitchez!!! (I know that's so yesterday.)
What about gold?
Full Fed Report:
Treasury and Federal Reserve Domestic and Foreign Gold Market Operations, April--June 2010
Gold britches?
Have always had this question - assuming that Fed was a buyer of equities at 666 and between 666 & 1150 on the S&P, is the Fed not sitting on some pretty good profits in equities ? Its possible that even though they are bleeding their guts out on the MBS & UST purchases, the profits in equities gets them to breakeven ? just a thought for ZH to chew on...
Why do you think GM is being put on the IPO docket as quickly as possible?
I have always wanted to know why they chose 666 as the bottom. Is it a sign they work for the devil?
No one believes what the FED says anymore, because they spew nothing but lies. Everyone knows they are intervening in all the markets. Obama put the wrong idiots around him, and now he will pay the price by losing the next election in a landslide. Elmo could run for President and win over Obama.
Obama put the wrong idiots around him, and now he will pay the price by losing the next election in a landslide
HaHaHa! A democrat!
No, you stupid! Your ObaMao himself was put into office!
And they are not idiots, it's you, the sheeple who are the fucked idiots cos you PAY for that. Unfortunately the whole world suffers due to your greed, stupidity and violence!
sadly next time you'll put another Bush into office and so on.
i got back into trading in may and june after 6 years. no fucking way that whole thing wasnt manipulated in every way
but intervening is what they do...?
The difference between intervention and manipulation is what elevates man to carry out God's work.
Yeah, I don't know what that means either. I just thought it was a good idea to distract you with cosmic thoughts while I reached for the anal probe.
.
Oh. We got a scrapper.
Charlene, cancel my 2:00 appointment.
When lying is a way of life ......................................
Too funny hearing them parse. It's like watching a drug addict parse language about their addiction... "I didn't use those needles, I used the other ones and smoked the rest."
Manipulation is in the eye of the beholder.
so is voyerism
Meh... what did you expect him to say?
Yeah right, and Bill Clinton did not have sex with that woman.
In response to these strains, the Federal Reserve reactivated U.S. dollar liquidity swap facilities with the Bank of England (BoE), etc.........
Were the swap lines ever truly closed from the initial announcement, or was there another time in history that this has been the case?
Total BS, Ben Bukkakee manipulates himself all the time...
So that was really warm smelly rain streaming up and down my back too?
Swap effect exchange rates, they did carry out swap in Q2, right?
'Fed Claims It Did Not Manipulate Currencies In Q2'.
Errm, a naïve question, but if they DIDN'T intervene, why do they feel the need to say they didn't....?
Ooo-err.
DavidC
depends on your definition of "interverntion" ---- if "intervention" meant printing..... by that standard, it's not monthly or quarterly it's continuous, currently. they have a very, very tough job to do at the moment. shawn mesaros, pamria llc
The US central bank may not have intervened directly, but that doesn't mean others did not do so on its behalf, direction or insistence.
For all the blowing hard about intervention or not, this is the one metric that the FED can't change and where the whole problem lies-courtesy of teh St. Louis FED:
http://research.stlouisfed.org/fred2/series/MULT
What struck me about this Fed statement was what they did NOT claim to have not meddled in: stocks, futures markets, etc.
Can we assume that since they claimed ONLY to have not intervened in the currency markets, that they DID intervene in all the others? That's a frightening prospect to me!
From the Fed statement -.