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Fed Conducts Fourth Sequential Reverse Repo Test For $225 Million
The Fed is really picking up on its reverse repo operations, even if for completely meaningless amounts. Today's 4th sequential reverse repo test follows yesterday's of the same size, the only difference is the term, which dropped to 3 days today from 8 days yesterday. The question of when these will shift from tests to actual liquidity extractions (and collateralized by anything than 0% Treasuries) is open, and if Goldman is right expect nothing to happen here for several years.
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This entire "Reverse Repo" operation has the stench of misdirection and cover-up to it. Me thinks it will turn into (if it isn't already) another way of pumping liquidity into the markets after they announce that QE is finally, really, honest-to-God-cross-my-heart-and-hope-to-die finished.
Agreed, and these are just the things we hear about. I would love to know what's going on under the table, behind closed doors, and the cracks of corruption under the radar.
This is precisely why the Ron Paul bill (at least a version with teeth) will never be passed. The disinfectant sunshine supplies will never shine in the halls of the Fed without a major battle. I have no doubt the Fed would intentionally crash the banks/economy if they felt seriously threatened.
In fact, I believe they already did, for various reasons. This entire affair is simply the redistribution of wealth before a "world government" (aka new world order) is implemented. Regardless of whether it take 5 years or 50 years, that is the goal. It's talked about openly and frequently by the powers that be. Just listen with an open mind to what's being said.
Leave your preconceived notions and life long programming at the door. Learn to translate the double speak. It's all there, out in the open, for all to see. I did a Nexus search for the term "new world order" 6 months ago, filtering out web sites and other "non-official" sources. Those words are coming from the mouths of every major leader in the world.
yes they will have to reverse the reverse in size
I'll take the other side of that bet. I think they are trying to desensitize the markets to the reverse repos, hoping to quietly ramp them up without causing panic.
Trivial sidebar: If you wish to catch a frog, you bring your hand with lots of movement of the fingers from far away. The frog sees it, senses no imminent danger, and simply watches it. As your hand gets close, the frog fails to recognize that he/she is in danger. The Fed is wiggling its fingers from a long ways away.
Timmay Live
http://cspan.org/Watch/Media/2009/12/10/HP/R/27032/Administration+extend...
The Congressional panel overseeing the spending of the Troubled Asset Relief Program (TARP) is meeting to examine the findings of its year-end review, and also to hear from Treasury Secretary Timothy Geithner about his department’s management of the TARP program.
Thank you. I had hopes of CNBC covering this, but all they want to do is pump Citi stock.
I take that back. Listening to this lying little fuck just makes my blood boil.
The answer to when these will shift to actual liquidity extractions is never. This is the Fed saying "hey everybody look what we can do!", so it can manage an orderly dollar decline.
We agree with you Bee. One photo sums it up.
http://unitedcats.files.wordpress.com/2007/01/dog_and_pony_show.jpg
LOL! A picture is worth a thousand words.
Anyone wonder if Goldman is trying to intentionally get stuff wrong in the hopes that people might say "Gee, maybe they don't get all the information up front!"
These "liquidity operations" are all part and parcel of three card monte bigger confidence game.
The FED will market this as an inflation fighting tactic.As in, they can suck cash in when needed.) The real story is that there are trillions(like almost 3) in cash in money markets and cash accounts all over the US. It's just sitting there, because the smart people aren't going to invest their money in a stock with a PE of 110. Like GOLD in the 30's, this is a confiscation of "cash" and swapped for Treasuries. This is just more fractional reserve,PONZI baloney by the FED which needs "cash" in any way,shape or form to gun the stock market,save Goldman,save Dubai,Save Greece or recapitalize the banks. The posters are right-it's a trial run to lock up investorcash as illiquid and allow the FED to inject all this cash into the system when the "time" comes. Meanwhile, The treasury and NoBama unilaterally offered another 500 bill in TARP money for a myriad of useless stimulus projects(researching why men don't like condoms, 5 million dollar/3 job creating projects etc) and payouts. The corruption is as wide as the Ocean...
Can anyone help a thickie like myself understand how these remove liquidity over the long term?
If the Fed sells an "asset" to the dealer, and the dealer give him $xyz, then that liquidity has been extracted. I get that.
But then the fed buys it back in 3 days for $xyz plus interest? And the liquidity is back in the system and the asset is back with the Fed.... How does this remove liquidity over time? What am I missing?
Thanks
You got me. Maybe it's a double-reverse-repo, with special sauce from Ben's "tool".
This is the latest con-game as the FED "talking" about tightening didn't work at all. A repo or in this case a reverse repo [RR] does add or extract liquidity from the banking system although the collateral does not actually change hands just the money.
You are missing nothing as this is not really intented to remove liquidity from the system, but to make you think that they "want" to remove it from the system. They don't.
But this ploy did have the "desired" effect as gold and other inflation trades [oil] have tanked and the dollar repurchased.
So in this respect the FED was entirely successful, which was their reason in the first case.
+1