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Fed Conducts Second Reverse Repo Test
Is it time for the liquidity bulls to panic? At $180 million probably
not, but while rates can't really go down (chukle, chukle Uncle Ben),
this number can only go up. As a reminder, the first repo test was a 3 day term, this one is 8 days. Long way to go before the collateral is the same bankrupt stocks that the Fed accepts in its tri-party repo agreements.
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Market off the lows again....I think that one day, the market is just going to break out or break down for NO EFFIN REASON and a lot of people will be burned one way or another. This market is not trading anymore on Fundamental, Technical, just Irrational.
No no, this market is trading perfection. Just not for you, or Main Street, or anyone outside of fraud street.
Completely savage the middle class is the name of the game, nothing more.
How does it feel to have the invisible hand be black and orchestrated against America? You better ask yourself because it's about to get much worse. (not to mention the thieves getting richer at the direct expense of those in the USA).
But.... irrationality is what the market ALWAYS trades on.
I'm biased to do range bound trades rather than range extension trades and in some stocks that I trade on regular basis, this market presents huge opportunities
I pray for market like this everyday
I'm getting an opinion that 90% of people here do not trade,
but think of themselves as traders and just bitch all day.
This market is the most technical market I've seen yet, and if you cannot
Blindly separate funnymentals from money flow in or out of an asset, you cannot trade
Period.
So what is the purpose of toying around with these piddly numbers? Is this part of their psychological training of rats in Skinner's boxes? Once the behaviour is engrained, they slip 3 or 4 zeros on the end of the numbers? Some things are too surreal to even question.
"this operation is part of the operational readiness program...."
Reminds me of those old 1950s Cold War public service flicks: If you see the light duck and cover.
Sorry to be the moron here, but what is the significance of these tests being conducted as tri-party repos rather than the usual.
Steve Liesman's eyes welled up and was filled with pride at the announcement. The Fed is in control and everything is gonna be alright.
Lets rerun the test with some of that top shelf MBS rubble
Yeah, at a haircut of 3 points.
A Fed insider's view of the crisis. Pretty good reading...
http://www.brookings.edu/economics/bpea/~/media/Files/Programs/ES/BPEA/2009_spring_bpea_papers/2009_spring_bpea_swagel.pdf
Correction: A Treasury insider's view..
I got to the third paragraph, and read this nonsense, "Legal constraints were omnipresent throughout the crisis, since Treasury and other government agencies such as the Federal Reserve must operate within existing legal authorities."
What a bunch of bullshit. There is nothing but fraud and theft in this whole orchestrated bank heist (err crisis, or how about "dislocation"). Legal authorities my ass, this is nothing but fraud and theft - how is that legal??
No confidence left from the common man's perspective.
Investment banks = deadbeat borrowers - one and the exact same.
"Investment banks = deadbeat borrowers - one and the exact same."
Well said, failure rewarded. Time for a bonus of either 5 years working man's salary or a free house (same difference).
I share your rage. However if you can stand to read further therer are some insights that I otherwise haven't read anywhere else. FWIW, The Fed was allegedly irate that this guy published this paper.
Are these similar to the "stress tests" that were conducted earlier this year?
why are you guys so up in arms about this? before late 2008, the fed often did reverse repo. triparty is new (only for the fed) and the counterparty list is bigger, but so what?
that the collateral is shit is a non-issue as long as your counter party returns the dough (defaulting on the NY Fed is probably not very good for biz) - i mean, this ain't maiden lane, the fed has no intention of buying the collateral (for now at least)
So how is a revRepo really drawing anything out of the mkt? The transaction just reverses itself. Shouldn't we worry (cheer) when they actually start selling the siht on their balance sheet??
When the Fed starts doing significant Reverse repos 20-30bln, it may indicate that they are ready to sop up all the excess liquidity they have created over the last 1.5 years. that may indicate that a rate hike will soon occur.