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Federal Reserve Balance Sheet Update: Week Of August 12

Tyler Durden's picture


Total Federal Reserve balance sheet assets for the week of August 12 of $1,990 billion (an increase of $13 billion from the prior week) consisting of:

  • Securities held outright: $1,373 billion
    (an increase of $107 billion MoM, resulting from $43.7 billion in new
    Treasury purchases,
    $53.8 billion increase in MBS and $9.4 billion in Agency Debt), or $18.6 billion increase sequentially
  • Net borrowings: $340.5 billion (a decline of $47 billion month over month)
  • Float, liquidity swaps, Maiden Lane and other assets: $277 billion
    (another record decrease of $83.7 billion month over month due to a continued reduction in Central Bank
    Liquidity Swaps
    ($32 billion) and ($52) billion in CPFF outstandings).The rate of decline sequentially has, however, slowed dramatically and was just $5.6 billion lower than the prior week (after a $37.7 billion reduction in the prior week). It appears the Fed has reached the threshold in removing Swap and CPFF liquidity.
  • Foreign
    bank liquidity swaps have hit another lowest level since the Lehman
    bankruptcy ($76.2 billion), athough the rate of sequential decline has slowed to a crawl. We would not be surprised if next week the Fed indicated more liquidity was being pumped into CB Swaps.

of US Securities decreased for the first time in 5 months by $299 million sequentially (weekly) to
$2,809.9 billion from $2,810.2 billion in the prior month. Keep in mind in the same time period the Fed purchased over $16.6 billion of Treasuries, indicating that in the last week the Fed was the only purchaser of Treasuries. In a normal environment this would be a very troubling development.

And to underscore that deflation still rules, The Federal Reserve's Monetary Base number of $1,643 billion was a decline of $31 billion MoM. Additionally Deposit Reserves were at $772.6 billion, a $33.2 billion decline MoM (hopefully this simply means that some banks have finally resorted to pushing excess reserves out of the basement and out the door).


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Thu, 08/13/2009 - 23:55 | 36362 Crook County
Fri, 08/14/2009 - 00:37 | 36438 Anonymous
Anonymous's picture

Audit me if you can. Hint: no reserve for you (Geithner), you (obama),you (Frank, Dodd, Pelosi, Reid, etc), you(banksters) and you (bagholders, aka taxpayers).

Fri, 08/14/2009 - 08:34 | 36635 Anonymous
Anonymous's picture



Fri, 08/14/2009 - 00:09 | 36387 molecool
molecool's picture

"In a normal environment this would be a very troubling development."

Snake eating its own tail?

Fri, 08/14/2009 - 00:09 | 36389 John117
John117's picture

Love your work TD.   Keep it up.  We've somehow got to get the American public to be as upset about this (mostly illegal) balance sheet as they are about healthcare legislation this week.  It's criminal the Fed's getting away with this crap and most folks are oblivious or willfully negligent.  Hello, Congress!!  Do you darn job!

Fri, 08/14/2009 - 00:13 | 36401 simonsays
simonsays's picture

The Healthcare charade is exactly that, a charade. Seems like a lot of puff for a 1000 page bill nobody has actually read. All this hooplah over MSM soundbytes - doing a damn good job of keeping people distracted from the current economic situation. It's as simple as pulling a rabbit out of a hat. 

Fri, 08/14/2009 - 00:22 | 36414 John117
John117's picture

Been thinking the same thing all week myself.  It's just like the AIG Bonus red herring.  Yes, let's get pissed off about $100M going to some execs but ignore the $130BILLION that just cycled through there to cover Hank's buddies asses.

Fri, 08/14/2009 - 00:09 | 36392 Anonymous
Anonymous's picture


the obama joker image is going viral. Would it be ok if Zero Intelligence placed a large picture of a obama joker face somewhere on the front page? a little comedy would be nice around here with all of this grave news, etc.

Fri, 08/14/2009 - 00:12 | 36398 GoldmanSux
GoldmanSux's picture

Cheeky needs royalties.

Fri, 08/14/2009 - 00:30 | 36428 Anonymous
Anonymous's picture

man what did you guys do with mi amigo from the balkans...:)

Fri, 08/14/2009 - 12:04 | 36836 Cheeky Bastard
Cheeky Bastard's picture


Fri, 08/14/2009 - 00:11 | 36395 Anonymous
Anonymous's picture

oh, i wish you guys would quit worrying about that. we here at the FED are going to start tightening up our balance sheet in September of this year. Relax guys, we got it all under control.

Fri, 08/14/2009 - 00:14 | 36404 John117
John117's picture

Awesome to know.  I'll sleep better about my Dec XLF puts tonight.  Let me know where to send your tip if I get a three bagger.

Fri, 08/14/2009 - 00:42 | 36442 Gilgamesh
Gilgamesh's picture

Will Candid Camera be there when we lay in the bed you've made and find out we got short-sheeted?

Fri, 08/14/2009 - 01:03 | 36466 Harbourcity
Harbourcity's picture

Can you print a couple bucks up for us guys in the mailroom... we have a craving for Chinese.

Fri, 08/14/2009 - 01:06 | 36468 Anonymous
Anonymous's picture

So, you are ready to crush the equity market to promote the bond-safety trade?

Fri, 08/14/2009 - 00:12 | 36397 buyingnone (not verified)
buyingnone's picture

USA will remain forever an indebted nation

Fri, 08/14/2009 - 00:28 | 36422 Dixie Normous
Dixie Normous's picture

I used to box when I was a kid.

I tried the strategy where I would wave my left way off to the side (healthcare debate) in the hope the guy would look so I could hit him with a haymaker right (everything else in the economy).

Works great until your opponent punches you in the gut (peasant uprising?).

Fri, 08/14/2009 - 00:32 | 36433 My cognitive di...
My cognitive dissonance's picture

To think, the dollar is going to jump up again.


Fri, 08/14/2009 - 00:35 | 36436 Anonymous
Anonymous's picture

anyone know enough to say if this is a big deal or not? supposedly 500bn was borrowed from secondary window and this is way out of the normal...


Fri, 08/14/2009 - 00:49 | 36452 Anonymous
Anonymous's picture

a small crook borrowed circa 500 million, no big deal. Could be CIT.

Fri, 08/14/2009 - 00:52 | 36457 Anonymous
Anonymous's picture

Interesting, but sounds like it's 500 *million*, not billion. Could be a regional or smaller bank needing that much.

Fri, 08/14/2009 - 01:36 | 36493 Anonymous
Anonymous's picture

Secondary window is the window of last resort. Time will tell,l no need to speculate. Sit back and enjoy.

Fri, 08/14/2009 - 00:48 | 36451 Anonymous
Anonymous's picture

This sounds to be close to the root of the problem... good or bad?

August 12, 2009 --

HARRY Markopolos -- the whistleblower on Bernie Madoff who proved to be much smarter than the SEC -- says there are evildoers out there who will make the Ponzi scum "look like small-time." Markopolos gave a speech to 400 of the faithful at the Greek Orthodox Church in Southampton and predicted major scandals will soon be revealed about the unregulated, $600 trillion, credit-default swap market. "To put it in simple terms, it is like buying fire insurance policies from five different insurance companies on your neighbor's house and then burning down the house," he said. After his lecture, Hampton Sheet publisher Joan Jedell reports Markopolos was feted at a dinner at Nello Summertimes hosted by John Catsimatidis and his wife, Margo, who were joined by Al D'Amato and Greek shipping magnates Nicholas Zoullas and Spiros Milonas.

Fri, 08/14/2009 - 00:58 | 36463 Anonymous
Anonymous's picture

For that to happen, interest rate swap derivative must implode and bring down the top 5 banks down if they are on the wrong side of the trade. For the interest rate swap implode, I guess the treasury market must dislocate, that means, the Fed Reserve must be neutralized,i.e., bond vigilantes in the world must unite. If Markipolos is right, say goodby to the US of A.

Fri, 08/14/2009 - 01:45 | 36499 Anonymous
Anonymous's picture

They are going to do just as much with this as the information about Madoff. It aint going to see the light of day.

Fri, 08/14/2009 - 01:09 | 36470 Anonymous
Anonymous's picture

Aug. 14 (Bloomberg) -- More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a bank’s equity and threaten its survival.

The number of banks exceeding the threshold more than doubled in the year through June, according to data compiled by Bloomberg, as real estate and credit-card defaults surged. Almost 300 reported 3 percent or more of their loans were nonperforming, a term for commercial and consumer debt that has stopped collecting interest or will no longer be paid in full.


Fri, 08/14/2009 - 01:55 | 36503 Anonymous
Anonymous's picture

those idiots who keep holding money in these banks will be having a hard time getting their money back when shit hits the fan.

150 banks - $197B in deposits. FDIC is already insolvent and couldn't seize Corus, Colonial and Guaranty for more than two months already. their depositors - total idiots.

Fri, 08/14/2009 - 03:44 | 36551 Hephasteus
Hephasteus's picture

I have been on edge all day and decided to really poke my head deep into the abyss. I find your comments totally believable. The banks are collapsing at a rate that can't be sustained and bank holidays and limits on how much you can withdraw and how fast are probably coming.

Don't line up for any flu shots. I'm paying bills tomorow if any have come though its so early int he month don't think any would show up by now.

Fri, 08/14/2009 - 02:11 | 36512 Anonymous
Anonymous's picture

How to cause an interest rate derivative dislocation: let the accountants at FASB revive mark-to-market accounting. [Oh, that's right - they've said they're going to do that sometime in the next month or two.]

Fri, 08/14/2009 - 01:43 | 36497 Anonymous
Anonymous's picture

the inflation is in the price of stocks. that's the bubble. stock it into an asset class, ramp up stocks, no inflation!!!! worked for tech bubble, housing bubble, as long as out of commodites it's OK. That's the deflation!!

Fri, 08/14/2009 - 02:42 | 36529 ghostfaceinvestah
ghostfaceinvestah's picture

there is a strong correlation between the money Bernanke has printed and the increase in value of stocks.

Fri, 08/14/2009 - 01:44 | 36498 Anonymous
Anonymous's picture

Aug. 14 (Bloomberg) -- If there is any doubt that President Barack Obama’s plan to overhaul U.S. health care is the hottest topic in Congress, just ask the 3,300 lobbyists who have lined up to work on the issue.

That’s six lobbyists for each of the 535 members of the House and Senate, according to Senate records, and three times the number of people registered to lobby on defense. More than 1,500 organizations have health-care lobbyists, and about three more are signing up each day. Every one of the 10 biggest lobbying firms by revenue is involved in an effort that could affect 17 percent of the U.S. economy.

These groups spent $263.4 million on lobbying during the first six months of 2009, according to the Center for Responsive Politics, a Washington-based research group, more than any other industry. They spent $241.4 million during the same period of 2008. Drugmakers alone spent $134.5 million, 64 percent more than the next biggest-spenders, oil and gas companies.

“Whenever you have a big piece of legislation like this, it’s like ringing the dinner bell for K Street,” said Bill Allison, a senior fellow at the Sunlight Foundation, a Washington-based watchdog group, referring to the street in the capital where many lobbying firms have offices

What's that bell I hear?

Fri, 08/14/2009 - 02:10 | 36510 D.O.D.
D.O.D.'s picture

Democrats concede and remove "Kill Grandma Provision" from the health care bill

Obama sells out to big Pharama, and Health Care reform is dead



Fri, 08/14/2009 - 02:09 | 36508 Anonymous
Anonymous's picture

S&P 500 Statistics
As of July 31, 2009

Total Market Value ($ Billion) 8,660
Mean Market Value ($ Million) 17,319
Median Market Value ($ Million) 7,096
Weighted Ave. Market Value ($ Million) 71,956
Largest Cos. Market Value ($ Million) 343,483
Smallest Cos. Market Value ($ Million) 712
Median Share Price ($) 30.050
P/E Ratio* 143.95
Indicated Dividend Yield (%) 2.18
NM - Not Meaningful
*Based on As Reported Earnings.

Market Coverage

Fri, 08/14/2009 - 02:42 | 36528 ghostfaceinvestah
ghostfaceinvestah's picture

Total Market Value ($ Billion) 8,660


And Bernanke is going to buy $1,250 of agency MBS, equal to 7% of the total market cap of the S&P as it stands today.



Fri, 08/14/2009 - 07:17 | 36592 Anonymous
Anonymous's picture

That's 14.4%!

Fri, 08/14/2009 - 02:27 | 36519 Anonymous
Anonymous's picture

When treasury buyers demand to be paid...
Many of you will run for the shade...
Looking for refuge in gold for your aid...
Not watching as the inflation trade fades...
Fear not the dollar, although not backed by gold...
Our military backs it if truth were be told...

Fri, 08/14/2009 - 02:49 | 36532 Anonymous
Anonymous's picture

Son of Harry 'Breaker' Morant?

Fri, 08/14/2009 - 03:20 | 36543 Anonymous
Anonymous's picture

"Harry Morant" Obviously not because I must confess
I had to "Wikipedia" this one to remember. Oh and that
would be daughter:) Sorry not a "Ivory Tower Prowler."
Just having a little fun as I read financial news:)

Fri, 08/14/2009 - 14:18 | 36782 fedusw (not verified)
fedusw's picture

Nobody wants to refinance the borrower on an unsecured basis, so the borrower has to raise new equity. The new equity provides potential secured lenders enough of a cushion they are comfortable lending on secured basis.

good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions

Fri, 08/14/2009 - 02:28 | 36521 Tesla
Tesla's picture

"Keep in mind in the same time period the Fed purchased over $16.6 billion of Treasuries, indicating that in the last week the Fed was the only purchaser of Treasuries. In a normal environment this would be a very troubling development."

Sorry, but I'm not a finance professional. If this is true, could someone please explain:

1. Why Bernanke said he'd stop buy backs in October?

2. Who's going to buy all the other debt that's coming onto the market over the next few months?

3. Where is the money going if not in Tbills? How is Europe going to finance all of its debt?


If someone even knows of a webpage that answers these questions, I'd be grateful if you could post it. I couldn't find any decent answers.


BTW, given how many pros there are on this board--could someone please explain how you view WS? You guys seem to be making fortunes from the very system you deride (statistically speaking, I'm sure that at least a few of you have jobs and got bonuses due to the gov't bailout). I don't understand what you are "hoping for" going forward? Decline and fall of WallStreet (which seems pretty inevitable, IMO)? Back to the "normal" early 90s? Something else altogether? I'm really lost on this one.

Fri, 08/14/2009 - 04:04 | 36555 Anonymous
Anonymous's picture

I work for a European bank , as bad as the rest of the Wall St mafia , and let me tell you i am prepared to take one for the team. A little bit of collateral damage is unavoidable if we are to get out of this mess. Wall St IS a monster and must be stopped. Financial innovation has now done more harm than good and we cannot put the genie back in the bottle - its time to press reset and rip it all down and start again.
So beit.

Fri, 08/14/2009 - 04:45 | 36570 Hephasteus
Hephasteus's picture

Power junkies want to go off it slowly but cold turkey is the only way to do it. Time for them to take authoritative action and watch everyone just blink and stare at them coldly.

Fri, 08/14/2009 - 02:40 | 36527 ghostfaceinvestah
ghostfaceinvestah's picture

"$53.8 billion increase in MBS and $9.4 billion in Agency Debt"

And it takes the Senate a week to debate adding 2B to C4C, while the Fed can buy 31X that of debt they are not legally allowed to buy,

Fri, 08/14/2009 - 02:46 | 36530 Anonymous
Anonymous's picture

Tesla...don't panic...

We are just turning "Japanese"....

Although we have a lot more catching up on personal a really really bad recession and then well...Japanese style nothing for years.

No hyperinflation unless Bernanke gets the boot..then I don't know depends on who they pick....but we have many inflation hawks in the look for a long boring -1 CPI for a long boring time. Relax you seem "stressed":) Nothing we can do about it now..the cake is well... baked.

Fri, 08/14/2009 - 02:47 | 36531 Anonymous
Anonymous's picture

woof ...

just wanted to answer the math question ..

Fri, 08/14/2009 - 03:03 | 36535 D.O.D.
D.O.D.'s picture

Aug. 14 (Bloomberg) -- More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a bank’s equity and threaten its survival.

Fri, 08/14/2009 - 03:46 | 36548 Glen
Glen's picture

Gotta love it. How do you get the market to buy your crap treasuries? Easy. Spook the market with some bad news stories right before a big treasury sale was imminent > market goes down > suckers looking foir safe haven > treasury sales goes well > roll in the greeshits news > market goes up again > bonds bought back by Fed "It's not monitorisation".  There's no manipulation here.

Fri, 08/14/2009 - 04:14 | 36558 Anonymous
Anonymous's picture

right and the hapless asian CBs are taking notes and staring in awestruck wonder. After all they tried all this and had a lot less success. Their price-keeping-operations etc were nowhere near as bold or comprehensive.

Fri, 08/14/2009 - 05:56 | 36580 Anonymous
Anonymous's picture

Greetings from India,

Have read many a post on ZH and all of the other message boards and the point I think I see missed most often is that we live in a multi-contextual world. Any commentary that does not implicitly or explicitly account for geo-politics/socio-economics/food-security/age-old inter-governmental agreements (aka US-Japan and US-Phillipines and US, UK and all it's former satellites...... you get my drift), is baseless commentary.

What good GATA and shadow-stats and truth and honesty and the like while there sit untold gold reserves in some hidden crypt stolen during WWI/II, all the black Swan type funds etc. etc, City of London ordering micro and macro moves..........

Best really to just know thyself, all else then becomes clear.

Regards all around.

Fri, 08/14/2009 - 07:42 | 36601 Anonymous
Anonymous's picture

Those things will be talked about once it is clear that governments around the world have FAILED their people en masse.

Fri, 08/14/2009 - 07:47 | 36605 gmak
gmak's picture

1. You don't need to spook the market to have it go down if you are the FED. Simply pull liquidity from the system, according to many. 

2. I have looked at the B/S change as a proxy for "pulling liquidity from the system, and compared to the changes in the SPX; starting at 5 days before the B/S date (wednesdays of each week) and ending at 5 days after the B/S date - for SPX returns. I also did the SPX returns for a 5 bus day period starting from 3 days before the B/S to 3 days after the B/S. I did a correlation beginning in 2006; then 2007; then August 2007, and finally 2008.

Perhaps the /- 5 day range is is too quick a time frame for FED B/S impact to be felt. I would appreciate comments on this from the astute minds here. All the correlations were negative, meaning that when the FED B/S shrinks, the SPX rose.

No surprise that this highest correlation is in the analysis that began at the start of 2008. The correlations run from -3% to -43% [ B/S change against SPX 5 day performance starting 2 days after B/S date]

Perhaps some of the astute minds here could provide an explanation (Excel Correl function is used), because this is the opposite of what I expected. I expected that when the FED B/S shrunk (pulling liquidity from the system) the SPX would fall.

Maybe I need to look at why the B/S changed and correlate against changes from certain items only.


Fri, 08/14/2009 - 08:08 | 36615 ShankyS
ShankyS's picture

"In a normal environment this would be a very troubling development." LOL, define normal? Not possible is it. This is just nuts and the market continues to rally. Yippie! Warning, bubble reflation machine is leaking fluid all over the place.

Fri, 08/14/2009 - 14:18 | 36777 fedusw (not verified)
fedusw's picture

The use of proceeds and the fact WFC and BAC stand to get taken out of their unsecured lending positions is disclosed. So what if they stand to make underwriting fees

good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions

Fri, 08/14/2009 - 11:58 | 36825 Anonymous
Anonymous's picture

can you guys comment on the 'net borrowings' part of this graph ? is the Fed funding some of its bond buys in the repo markets ( thus leveraging ) ?

Fri, 08/14/2009 - 13:22 | 36966 Anonymous
Anonymous's picture

It is interesting that the businessmen who have been/are in Asia tell a much different tale of China's leverage than the prepackaged info teat fed to the masses. The three Jim's (Rogers/Sinclair/Willie) are adamant that the Wile Coyote government will hear a whistle from China and look down, and we all know what happens after that. Like Armstrong said... "It's Just Time".

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