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Fed Pretends It Is Preparing To Soak Up Excess Reserves, Even As Currency Swaps Are Sure To Add About $500 Billion To Fed's Assets
Less than 24 hours after bailing out Europe for the latest time with hundreds of billlions of liquidity swaps (full terms TBD still, record short covering certainly not TBD), the Fed is pretending to be a prudent monetary power, by announcing that it will "conduct 5 small-value term deposit offers." As a reminder, in its January 2010 minutes, the Fed noted that it would "eventually" move to a less accomodative policy "using a term deposit facility (TDF) to absorb excess reserves." So the schizos at the Eccles building want the gullible public to believe that just like all those micro reverse repos that it conducted in late 2009 (which led nowhere), the TDF tests will be critical to withdrawing some of the $2.5 trillion in assets on the Fed's balance sheet. Well guess what: with about $500 billion in liquidity swaps about to hit the asset side of the ledger (that's a conservative estimate based on the last time the Fed went full bore on bailing out Europe, and sorry, that European bailout does not come cheap), Excess Reserves (fed liabilities) are about to skyrocket by a comparable amount to match the assets. And here is the double whammy: $500 billion in new excess reserves earning 0.25% for holder banks, means US banks are about to earn an additional $1.25 billion a year risk-free courtesy of US taxpayers, who already are getting the shaft by paying more for gas thanks to the privilege of having bailed out Europe and drowned the world in new and unprecedented gobs of excess liquidity! Simply stated, the Greek "bailout" is a roundabout way of funneling over another extra billion to US banks! Direct cost to US taxpayers to bailout Europe via IMF: $50 billion; Indirect cost to fund incremental bank excess reserves: $1.25 billion; The joy of being raped daily by the Fed-Wall Street complex and assuring another year of record Wall Street bonuses: priceless. Some things money can't buy. For everything else there are trillions in Federal Reserve Notes appearing each and every day out of thin air.
Full text of Fed statement:
The Federal Reserve Board has authorized up to five small-value offerings of term deposits under the Term Deposit Facility (TDF) to be conducted in coming months. The Board had indicated in its announcement on April 30 that it anticipated conducting such small-value offerings. These small-value offerings are designed to ensure the effectiveness of TDF operations and to provide eligible institutions with an opportunity to gain familiarity with term deposit procedures. The development of the TDF and the small-value TDF offerings are a matter of prudent planning and have no implication for the near-term conduct of monetary policy.
The Board also approved a basic structure for the small-value TDF offerings. Similar to many money market instruments, the term deposits offered will be simple fixed-rate instruments with maturities of 84 days or less and will be issued primarily through competitive single-price auctions. TDF offerings will also include a noncompetitive bidding option to ensure access to term deposits for smaller institutions.
The first small-value TDF offering could be held as early as mid-June. More information about the timing and other details of these small-value TDF offerings will be announced at a later date. Terms and conditions for the small-value TDF offerings as well as information about the steps that institutions must complete to be eligible to bid for term deposits are available at http://www.frbservices.org/centralbank/term_deposit_facility.html
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What did we expect? Isn't the fed mostly owned by european banks?
It doesn't matter who owns who anymore. There is no "nation" when it comes to money. Money is money, wherever. What matters more in WHERE it's invested and who's in how deep. France is up the highest today bc their banks were in deepest with emerging debts, greece, etc.. They got a short term bailout, the banks. If there were an argument about total banking wealth and power, the U.S. takes all comers. The U.S. banks dominate the global market. The Europe owns the Fed-thing is an old fantasy.
good
The longer the crisis goes on and the US T's and dollar are seen as a safe haven, it only further encourages the guv to spend ever more as the money is damn near free (really). Only trouble is the mounting principle to be repaid and size of monthly / annual rollover will suddenly one day, out of the blue, be a real problem (who couldanode). Just when John Q Public thinks we've made it to the "recovery" this hand will reach out of the grave to remind us of all our fiscal sins. The longer this crisis goes on the more the rubber band is gonna stretch and without warning snap (think non-linear). Do the math on the $15T w/ short term T's and what is today free money with willing "buyers" will suddenly someday be incredibly expensive and buyers scarce. Amazing how the PIGS went from minor annoyance seemingly forever to apocalyptic in a matter of a month or two. We all know we can't outgrow the debt, we don't have the political will to cut and save, so....in 6months or 18months or 3years time the rubber band will suddenly snap again. Could be PIGS again, could be UK, could be US. The longer it takes to get there the more unbelivable it will be that deficits do matter (think "housing prices would never go down") and the more spectacular the funding crisis ("expertz will say look at Italy, look at Japan...see, they've had deficits and doesn't seem to matter). Keynesianism will be taken to the nth degree before it is defeated and thrown into the rubbish pile of historical "ism's" along w/ communism, totalitarianism, fascism and any other "ism" taken to the extreme.
To stop now is to ask everyone who owns a home to allow a 10-?% further reduction in it's value, to allow wages to fall until americans are again able to compete globally (aka. a depression), to encourage people to save and take care of themselves instead of spend and look for a handout, to admit revenues can't pay for unfunded liabilities. This is not what the people have been prepared for by their leaders so we will take this all the way and prepare for those who are "surprised" just as they were surprised by housing prices collapsing.
My working theory is that sometime soon all will rush into the village church of the almighty dollar, the last safest place, only to find they've arrived at their own funeral. The doors will be barred, the building aflame, and on this day the world as we know it ends.
....
For Thine is the Kingdom
Between the conception
And the creation
Between the emotion
And the response
Falls the Shadow
Life is very long
Between the desire
And the spasm
Between the potency
And the existence
Between the essence
And the descent
Falls the Shadow
For Thine is the Kingdom
For Thine is
Life is
For Thine is the
This is the way the world ends
This is the way the world ends
This is the way the world ends
Not with a bang but a whimper.
- excerpt, The Hollow Men, TS Eliot
"And with a whimper, I'm fucking splitting, Jack"
http://www.youtube.com/watch?v=h5JXrP8yv8o&feature=related
We should make packs of playing cards with all of the faces of these crooks we have been blogging about for the past year on the cards. Then we could pass the decks out to the criminally insane and let them do what criminally insane people do.
HOWARD BEALE
This may be too hard to do. I would buy many decks of these cards and distribute them.
Could the banks be buffering up for a currency revaluation? e.g.
1. bank(s) begging balance $500b
2. uncle ben blows trillion(s) $ wad into banks making balance sheet at $1000t.
3. banks hold onto $ except for buying treasuries.
4. .gov devalues currency by 50% making the banks balance sheet back to $500b (they
don't lose anything) our bank accounts take it in the ass.
This way they can bankrupt the population into poverty, and keep their money/power.
We get a wonderful two tier soceity, just like every other shithole backwards ass
country. Just a thought... carry on.
I recently watched a program about wolves in Yellowstone that reminds me of the "wolfpacks" of speculators the EU officials are trying to fight off. In the summer, wolves really have to work hard to get a meal. All of their prey is well fed and healthy and the open ground makes it easy for them to outrun the pack. In the winter it is a completely different story. The elk, caribou, deer, whatnot are slow and lethargic from the lack of food. The snow-covered landscape makes it difficult to outrun the wolves. As a result, a wolfpack has a near 100% success rate on each hunt. They simply pick an animal and attack it until it falls. The elk that tries to fight just wastes precious energy. Europeans should remember that when they try to lash out at the "wolves." The best strategy to survive the winter is not to fight the wolves, but stay healthier than the sickest member of the herd.
The best way to fight the wolf pack or any other preditor is not to be the weakest prey. Ots hard to go BK when you are not in debt. Had Grease been living within its means, there would have been nothing to attack.
Hambone - nice post above!
Just listened to the market meltdown .mp3 for the hundreth time, and realized it starts at the bottom. Anyone have the top down audio?
The Fed reminds me exactly of the monster who's SOOO powerful he ends up sucking up the ENTIRE UNIVERSE through his nose(!) Including himself.....leaving the Fab Four in Nowhere Land..(!)......
http://web.mit.edu/jonb/www/animate/yellsub.jpg
And yet Gold was down today. LMFAO!!!!
Ya 1202, it really fell off a cliff. What was it last month 1130 something. Wow its really taking a dive.
I couldn't do without you Jory/Bates/Wanger. Seriously.
Gold has gone comatose (silver/platinum as well) in its 1st level of support, $1203; this after London let it drop and NY bought and batted it down all day. Asia, psst...buy gold.
GLD has traced out a nice 5-month "cup," and looks to be building the "handle" now, by drifting slowly lower on falling volume. If this interpretation is correct, we don't have long to wait.
Paper gold up AUD$6.40 here today. Market down 0.3% so far.
jory the crown prince of laughs ,
gold gone from 1140 to 1203 and only a flim flam guy can preach it has gone down .
do you know the difference from a back end of a cow jumping over a fence and a hole in the ground
look in the mirror
Speaking of surrealism... Decoding the Subtext:
whenever the world order gets threatened, the defenders always resort to surreal imagery to describe their enemies and themselves, so as to excite the unsuspecting public's passion: Wolf Packs....(vaguely reminiscent of barbarians and gates), Phat Fingers (vaguely reminiscent of Roman depravity), "The machines did it" (vaguely retro anti-tech sci fi)....Things keep getting stranger.
Bank Swaps, Libor Show Doubts on Europe Bailout: Credit Markets
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By Abigail Moses and Shannon D. Harrington
May 10 (Bloomberg) -- The cost to protect bank bonds from losses and money markets show investors are concerned that the almost $1 trillion rescue package announced by European leaders may not be enough to contain the region’s sovereign debt crisis.
In the NOT so old days, before electronic clearing, banks would ‘pay the float’ on checks, and it was easy for the organized crooks, like the fed, which were in good standing with the banks, like the fed, to game the system, like the fed, due to lack of transparency, like the fed.
but we are far more advanced than that today.
October 05, 2009 — Dick Morris discusses how the United States, at the G20 conference, put itself under the guidance and, ultimately, control of the International Monetary Fund even as it succeeded in turning more power in that organization over to debtor nations. The Declaration of Independence is being repealed before our eyes.
http://www.youtube.com/watch?v=xbTCmSdHvrk
The sheep rally to audit the FEDERAL RESERVE. By design, its to move into the next direction. The Good Cop vs. Bad Cop is being playing to the hilt.
If there is a purpose to the liquidity swap, can someone explain the mechanism by which "holder banks" are going to earn an extra $1.25bn a year?
I don't see it. If the swap is simply a method by which counterparty central banks can temporarily 'maintain' their foreign currency or official international reserves (depending on their accounting obviously) while conducting forex market intervention, this is like a short-term version of what GS is getting trouble with having done for the Greek government years ago. If it is actually to ensure dollar funding is available to roll over short-term local liabilities, then it should not show up on the Fed's balance sheet in the 'deposits of depository institutions' line (which I think would incur the 25bp rate. A roll in the source of the funding would not change the level unless the US bank institution had no other place to place the money and 'needed' to keep their balance sheet elevated. Most banks which lend internationally have higher funding rates than 25bp so they could 'save money' and make everyone happier (by reducing their leverage ratios) simply by buying back their own debt at an implied interest rate of higher than 25bp.
Am I missing something? I must be...
The Bank for International Settlements - Patrick Carmack on Economics 101
http://www.youtube.com/watch?v=AbblujbDuWE
QRM
http://www.youtube.com/watch?v=4DrwteBzo0U
April 12, 2007 — In this clip from RiskTelevision.com, William DuMond of the Securities Operations Forum discusses how Basel II Capital Requirements Impact Operational Risk Management.
Basel II Impact on Operational Risk
http://www.youtube.com/watch?v=LaiZRkwjNXo
Max Keiser on Jones- "WOLFPACK" Explained:
The Alex Jones Show Mon 05.10.2010 (TV) part-9
http://www.youtube.com/watch?v=4duUUS1PLF0
The Alex Jones Show Mon 05.10.2010 (TV) part-10
http://www.youtube.com/watch?v=p87Q0BMy09Q
The Alex Jones Show Mon 05.10.2010 (TV) part-11
http://www.youtube.com/watch?v=t9CQxPZ98Po
The Alex Jones Show Mon 05.10.2010 (TV) part-12
http://www.youtube.com/watch?v=0nKf_U9sANM
The Alex Jones Show Mon 05.10.2010 (TV) part-13
http://www.youtube.com/watch?v=yealJb2GUQo
The Alex Jones Show Mon 05.10.2010 (TV) part-14
http://www.youtube.com/watch?v=jFULPOJpX5g
The Alex Jones Show Mon 05.10.2010 (TV) part-15
http://www.youtube.com/watch?v=yzlISjjRFAY
The Alex Jones Show Mon 05.10.2010 (TV) part-16
http://www.youtube.com/watch?v=Lt4PmgLP5XQ
The Alex Jones Show Mon 05.10.2010 (TV) part-17
http://www.youtube.com/watch?v=kKRDamH2ggc
It seems the entire world has gone upside down, inside out, spinning aimlessly out of control. Logic exists with only the few. Confusion reigns as complex financial vehicles reek havoc across the entire world. Financial institutions doing God's Work? Speculators face off with impunity against entire countries. Armies stand by powerless except to put down rioters.
Should we ask ourselves just who is to blame or better yet who all is involved?
What is the underlying commonality?
How do we survive?
You can never fully understand just who is involved. TPTB understand that the
human mind can only handle so many facts. Then we short circuit.
Kennedy assassination for example, Russians/Cubans/Lone Nut/CIA/MOB so on. You follow one trail and the others get neglected. You try to tie them all in and it looks crazy.
911 same approach.
BOOM information overload.
We survive as people always have one moment at a time because all things must pass.
http://www.wikiwak.com/image/Shitennoj+honbo+garden06s3200.jpg
zenstastic link duuude, arigato.
Tuck into bed music to digest your future and the ambitions of a few.
Ministry - Useless
http://www.youtube.com/watch?v=a3Zo1jngsK0
Soft Parade
When I was back there in seminary school
There was a person there
Who put forth the proposition
That you can petition the Lord with prayer
Petition the lord with prayer
Petition the lord with prayer
You cannot petition the lord with prayer
Can you give me sanctuary?
I must find a place to hide
A place for me to hide
Can you find me soft asylum?
I can't make it anymore
The man is at the door
Peppermint, miniskirts, chocolate candy
Champion sax and a girl named Sandy
There's only four ways to get unraveled
One is to sleep and the other is travel, da da
One is a bandit up in the hills
One is to love your neighbor 'til
His wife gets home
Catacombs, nursery bones
Winter women
Growing stones
Carrying babies
To the river
Streets and shoes
Avenues
Leather riders
Selling news
The monk bought lunch
Ha ha, he bought a little
Yes, he did
Woo!
This is the best part of the trip
This is the trip, the best part
I really like
What'd he say?
Yeah
Yeah, right
Pretty good, huh
Huh!
Yeah, I'm proud to be a part of this number
Successful hills are here to stay
Everything must be this way
Gentle streets where people play
Welcome to the soft parade
All our lives we sweat and save
Building for a shallow grave
Must be something else we say
Somehow to defend this place
Everything must be this way
Everything must be this way, yeah
The soft parade has now begun
Listen to the engines hum
People out to have some fun
A cobra on my left
Leopard on my right, yeah
The deer woman in a silk dress
Girls with beads around their necks
Kiss the hunter of the green vest
Who has wrestled before
With lions in the night
Out of sight
The lights are getting brighter
The radio is moaning calling to the dogs
There are still a few animals
Left out in the yard
But it's getting harder to describe sailors
To the underfed
Tropic corridor, tropic treasure
What got us this far to this mild equator?
We need someone or something new
Something else to get us through, yeah, c'mon
Callin' on the dogs
Callin' on the dogs
Oh, it's gettin' harder
Callin' on the dogs
Callin' in the dogs
Callin' all the dogs
Callin' on the Gods
You gotta meet me
Too late, baby
Slay a few animals
At the crossroads
Too late
All in the yard
But it's gettin' harder
By the crossroads
You gotta meet me
Oh, we're goin', we're goin great at the edge of town
Tropic corridor, tropic treasure
Havin' a good time got to come along
What got us this far to this mild equator?
Outskirts of the city
You and I we need someone new
Somethin' new
Somethin' else to get us through
Better bring your gun
Better bring your gun
Tropic corridor, tropic treasure
We're gonna ride and have some fun
When all else fails
We can whip the horse's eyes
And make them sleep
And cry
Welcome To The Black Parade
When I was a young boy
My father took me into the city
To see a marching band
He said, "Son, when you grow up
Would you be the savior of the broken
The beaten and the damned??
He said, "Will you defeat them
Your demons and all the non-believers
The plans that they have made?
Because one day, I'll leave you
A phantom to lead you in the summer
To join the Black Parade"
Sometimes I get the feeling
She's watching over me
And other times I feel like I should go
And through it all, the rise and fall
The bodies in the streets
And when you're gone we want you all to know
We'll carry on, we'll carry on
And though you're dead and gone, believe me
Your memory will carry on, we'll carry on
And in my heart, I can't contain it
The anthem won't explain it
And while that sends you reeling
From decimated dreams
Your misery and hate will kill us all
So paint it black and take it back
Let's shout out loud and clear
Do you fight it to the end?
We hear the call to carry on, we'll carry on
And though you're dead and gone, believe me
Your memory will carry on, we'll carry on
And though you're broken and defeated
You're weary widow marches
On and on we carry through the fears
Disappointed faces of your peers
Take a look at me
'Cause I could not care at all
Do or die, you'll never make me
Because the world will never take my heart
Though you try, you'll never break me
We want it all, we wanna play this part
Won't explain or say I'm sorry
I'm unashamed, I'm gonna show my scar
Give a cheer for all the broken
Listen here, because it's only
I'm just a man, I'm not a hero
Just a boy who wanna sing his song
Just a man, I'm not a hero
I don't care!
We'll carry on, we'll carry on
And though you're dead and gone, believe me
Your memory will carry on, you'll carry on
And though you're broken and defeated
You're weary widow marches on
Do or die, you'll never make me
Because the world will never take my heart
Though you try, you'll never break me
We want it all, we wanna play this part
(We'll carry on)
Do or die, you'll never make me
Because the world will never take my heart
Though you try, you'll never break me
We want it all, we wanna play this part
(We'll carry on)
- My Chemical Romance
Song link:
http://www.youtube.com/watch?v=kDWgsQhbaqU
I am just a new boy,
Stranger in this town.
Where are all the good times?
Who's gonna show this stranger around?
Ooooh, I need a dirty woman.
Ooooh, I need a dirty girl.
Will some cold woman in this desert land
Make me feel like a real man?
Take this rock and roll refugee
Oooh, baby set me free.
Ooooh, I need a dirty woman.
Ooooh, I need a dirty girl.
[Phone rings..Clink of receiver being lifted]
"Hello..?"
"Yes, a collect call for Mrs. Floyd from Mr. Floyd.
Will you accept the charges from United States?"
[clunk! of phone being put down]
"Oh, He hung up! That's your residence, right? I wonder why he hung up?
Is there supposed to be someone else there besides your wife there to answer?"
[Phone rings again...clunk of receiver being picked up]
"Hello?"
"This is United States calling, are we reaching...
[interrupted by phone being put down]
"See he keeps hanging up, and it's a man answering."
[whirr of connection being closed]
ok, GFDit, this wasn't a European bailout.
It was a reaction to a dollar liquidity crisis AGAIN, i.e., deflation. The swaps were the same thing they did post-Lehman.
Fed liquidity is the salve for the infection of dollar debt worldwide and the necessity of it for oil transactions.
Until and unless you get some sort of REAL SHIT backing your currency, it ain't jack. You peg to the fuckin dollar like a ho and take that shit.
If the FBI had any sort of credible evidence that the Fed has committed a crime they could go raid and 'audit' the Fed themselves.
OK Fed people, any leakers, whistleblowers?
How much would I give to see Lord Timothy Bernanke be lead away in handcuffs?
If I and my peers obtain credible evidence, when we find credible evidence, that the Fed has committed a crime we will not wait for the FBI to tear it down brick from brick with blood caked fingers.
Federal Reserve accused of Treason
http://revolutionnot.com/the-federal-reserve-accused-of-treason-in-1934/
Over/Under epic collapse tomorrow? Asia ain't havin' the FIAT!
Feels kind of ominous here. Market down a bit gold up a bit. Waiting for the STHF.
Looks the same from the eye in the sky as it does on the ground. EUR/USD cross weakening, gold/silver/platinum lie in wait. Ominous it is. I wonder if BS is even awake, or maybe his poyote pipe is hitting. Either way, he blew it. Time man of the year it is. Fitting.
If someone responds to your post on ZH, how do you know? the hard way?
Thx. I'm not smart enough obviously
Here's one not-too-efficient method:
Click on the "My Account" link in the upper left. A page with a bunch of tabs will appear. Click on the "Track" tab.
Threads upon which you have commented will appear. Check each of those threads...
(One thing that I've seen - over at The Agonist - is that each new comment can be automatically be tagged with a "New" - which doesn't happen here. - Since both sites run Drupal, it should be possible)...
US index futures heading for the shitter at the moment while the Euro getting its ass handed to it. Tomorrow should be an interesting day.
Mark my words. Gold is within 1% of a double top that will last at least a decade. Federal reserve notes 5x more rare than gold. Gold is only money if we go back to the cave man economy. Goldbugs are going to get smoked.
What makes me want to agree is that, in the past month, I've never heard more ads for gold on the radio, but I still can't figure out why these guys are so sure that gold will go to $2k, yet want to sell me theirs for cash instead of holding on to it.
I guess they're just really good dudes.
coin shops will sell the gold and have all the way up from 300,, why they profit on every sell...bid and ask
no difererence with radio ads ,, they need to eat , so they sell the bid and ask .
no mystery here ;
all ways you will find some body buying and selling gold ,
its not a matter of being sure of gold going to 2000 3000,,, its their business , make the spread ,
bret what makes you want to agree is a brain just north of lalal land
The scarcity of FRNs has very little to do with its value. People are losing faith in the fiat scam.
jory go smoke a tadpole... every time you open your mouth about gold it shows an empty brain..
whats the point ,,, your just blabbering ,, read whats going on. its not just a gold bug.. its the flight to preserve the asset ,,
An interesting DOW chart:
http://www.zerohedge.com/forum/latest-market-outlook-0
http://stockmarket618.wordpress.com
My friends; bretheren....
Part of me gets it. I am John Galt, and I often want nothing more than to be a short-order cook; if that is something of value I can give.
It becomes easier to understand when you remember that we are not separate from each other. The taste of bile at this thought is no less real than the physical reaction I have to yet another disturbance in the force, my desire to deny the "reality" I seeeeeeem to wake up to each day. The dream of a country I believed in, that idea, fades as quickly as do all my others upon waking. Yet is it real? Are we creating this together? Or is it just part of my Matrix unrealworld? We share the same nightmare. We will not awaken from it until we are called to act, together, in more than just words. Sharpen your pitchforks.
Matrix
make mine a couple eggs over easy, hash browns.. toast
p.s. thanks
is their a cost .. or are you making this a service lol
no charge, I like em over easy as well, but with green chile
oh, except, in galt-world, we expect a proper payment my friend
A small irrelevant request from this site is to reinstall the search button
Thks
You can use Google advanced search to much the same effect (just specify ZH as the domain you want to search).
On a lighter note, an interesting new use of 'legal tender for all debts public and private':
http://www.telegraph.co.uk/culture/culturepicturegalleries/7705464/Art-f...
Anyone care to see what the market prediction is for tomorrow based on Elliott Waves and with futures down.. figure there might be some up this late or awake this early that might be interested!
no surprise us.
nah.. won't bother doing a post.. since EW does not seem to be your cup of tea!
How do TPTB take our minds off the big problems of today? They give us the bigger problems of tomorrow.
Its one of the good platform for awareness of people. Keep sharing such stuff in the future too. xbox 360 s
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way
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