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Federal Reserve Balance Sheet Update: Week Of August 26
Total Federal Reserve balance sheet assets for the week of August 26 of $2,049 billion ($15 billion higher compared to the prior week's $2,034) consisting of:
- Securities held outright: $1,479 billion
(an increase of $135 billion MoM, resulting from $45.2 billion in new
Treasury purchases, $79.8 billion increase in MBS and $10.1 billion in Agency Debt), or $18.6 billion increase sequentially - Net borrowings: $327.6 billion, a decrease from the last update at $340.5 billion
- Float, liquidity swaps, Maiden Lane and other assets: $242.9 billion, a $15 billion decline on $4 billion reduction in CPFF and $9 billion in Liquidity Swaps which have now hit a low not seen since May 2008.
Foreign holdings increased by $9 billion to $2,826 billion. No change in the trends in the balance sheet with skyrocketing Securities Held Outright offset by declining Net Borrowings and Other Assets. Foreign holdings, as has lately been the case, are lagging the Fed's own purchases of securities, this week with a factor slightly higher than 2x.
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By balance sheet they mean trash can
At least the Brits have a little integrity. No green shoots here, courtesy of the London Times:
http://business.timesonline.co.uk/tol/business/columnists/article6813006.ece
Don't know how accurate considering the source, but Carlos Quientella of CNBC reported the BOE is considering (negative)interest rates on deposits. Meaning, customers would be charged to save money.
1.) Is this coming to America?
2.) Can you imagine the revolt if customers were charged for bank deposits?
3.) On top of outrageous overdraft fees?
This is the perfect scenario for systemic collapse. You charge me to keep "savings" at your institution, I come down there, withdraw ALL of my CASH, and keep it in the safe.
What happens to the bank's deposit base when everybody does this?
Negative interest rates on saving accounts that are taxed.......that sounds about right.
Negative interest rate on consumers' deposit? Immediate bank run and immediate bank collapse.
No, the negative interst rate is charged on the bank's reserve deposited in the Central bank, in a way to force banks to lend (i.e., don't hold excessive reserve)
I dare you, and yes, you,banksters, to charge negative interest on my deposit. I double dare you.
Fed is more levered than LEH and BSC. If they were to mark-to-market they would have been insolvent a year ago. Enron-USA continues.
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
there would be outrage, obviously
Japan first, but of course you would need to eliminate all cash. That final .1% of the money that is still physical cash is the hardest hurdle.
http://www.theaustralian.news.com.au/business/story/0,28124,25661617-643...
Hopefully such a blatant attempt at robbery would be a breaking point.
Any truth to the rumor the BOE is considering negative interest rates?
Is this coming to America?
Can anyone imagine the revolt if that happened?
Yes, I heard this as well. Isn't Sweden charging negative short-term rates right now? (-0.25%)
http://www.businessinsider.com/henry-blodget-swedish-central-bank-tries-negative-interest-rates-to-force-banks-to-lend-2009-8
No. The Riksbank's repo rate is 0.25%.
Anyone that thinks banks can get away with paying "negative interest" is an imbecile.
It will lead to massive disintermediation and lower the velocity of money to zero (as money is placed in mattresses instead of banks).
The Riksbank is charging negative interest on overnight deposits (deposit rate) of excess reverves. This was mainly done to discourage banks from parking excess reserves with the Riksbank (to encourage lending).
For 7 day deposit the interest rate (the repo rate) is positive 0.25%.
Thanks
http://en.wikipedia.org/wiki/Microchip_implant_%28human%29
I think a commenter on ZH prophesized this: http://www.bloomberg.com/apps/news?pid=20601087&sid=aFdr2fc23NRI
Toyota shutting down SF bay area assembly plant (forecasts by the White House Council of Economic Advisors notwithstanding)
On another note, hey Andy, try trading according to a football metaphor instead of golf. There is no "huddle" in golf. Hope this helps you out.
If it weren't the Fed it would be on a watch list.
So how's that defense of 78 going?
Tyler: Someone on your staff should contact Bob Prechter. Am being told he just increased his conviction to shorting the market. Good luck.
irrelevant. deficits don't matter. krugman told me.
Fed is more levered than LEH and BSC. If they were to mark-to-market they would have been insolvent a year ago. Enron-USA continues.
Question: If the Fed is swapping agencies for treasuries for Foreign Central Banks in the custody account (as yesterday's post assumed), how and where would that show up on tne Fed balance sheet? Anyone?
Its the red part of the graph. See the key, red = mbs.
Thanks for the response. The Fed has already announced they are buying MBS up to 1.25T, so an increase in red on the chart could be accounted for by this public announcement. The hypothesies that Agencies are being swapped for Treasuries should show up some where on the balance sheet, above and beyond the public pronouncements of QE.
Just looking for the proof, as I do not doubt it is happening.
Any truth to the rumors that the BOE will be applying negative interest rates on deposits?
Is this coming to America?
Would this cause a revolt?
Depends on what "negative interest rates" means. The damned deflationists have been ranting for months about all that money sitting in excess reserves not causing inflation since it's just sitting there, earning the banks interest being paid BY the Fed. The obvious response is of course that the nipple can be poisoned by charging the banks interest to be paid TO the Fed BY the banks on those reserves.
Such an act would see loan officers standing on streetcorners elbowing aside the crack hos and handing our loan applications. Add a backstop promise by the Fed to make good bank losses (which they're already doing) and you have another means to achieve inflation.
I don't think they're actually talking about negative rates on savings accounts (are they?). That would be a clear sign of last-ditch desperation.
http://fofoa.blogspot.com/2009/08/no-free-lunch.html
Maybe on point - it would be interesting to see a ZH project or even a post gathering thoughts on the subject of the Fed's "unwind" of the programs and how that might possibly play out, and what might be the repercussions. The starting points are fairly obvious. And it is the path forward that has been chosen, is it not? Recovery followed by unwind of now unnecessary bulking up by the Fed - maybe the better question is how do you start to create the illusion of the unwind?
Madness the rule, sanity the exception. Is there any universal law that requires sanity and order to return? The second law of thermodynamics does not require this, instead favoring greater entropy.
More Maiden Lane "assets" being wound down and replaced with Treasuries.
Looks like they still hold about $300 billion in Maiden Lane assets, which is quite close to the remaining amount of Treasuries to be purchased under the QE program ending in October.
It's pretty obvious that the reason the QE program was extended to October (and possibly beyond) is that the Fed needs that time to wind down the Maiden Lane portfolios.
just who exactly is going to pick up the maiden lane I-III "assets"
In case you haven't noticed, prices of "distressed" credit (ABX) have gone through the roof over the past five months. There are plenty of buyers out there -- enough so that the Fed need not have a "fire sale".
"
Fifty-five central banks own the BIS and every two months they journey to the Basel headquarters near the German border to discuss direction, drink the world’s best wines and to eat the best cuisine. Then there is the BIS’s privately owned country club and tennis accommodations. This is why the BIS is called the “Vatican of Finance.” All meetings are in secret and nothing is ever divulged. It is a stock cooperation and once was publicly traded until they forced sale of the shares owned by the public. Needless to say, they tried to screw the shareholders on the buyback.
The BIS pays no taxes and it’s members and employees enjoy extensive immunity. The BIS is totally a secret cabal of bankers. It manages 4% of the world’s currency reserves and 120 tons of gold. They set interest rates as well. What a sweet racket."
http://globalresearch.ca/index.php?context=va&aid=14918
"a carry tax on money may
not be feasible as a response to any events that might transpire in the next year, though it
certainly merits study as a possible response to events that might transpire in the next
decade"
Federal Reserve Bank of Dallas May 2003
note the nice helicopter photo
http://www.dallasfed.org/research/indepth/2003/id0304.pdf
As the Maiden Lane securities are plunging, VERY curious to know how much of those declines are ($/$) dispositions vs. old-fashioned writeoffs. Printing up some cash for themselves as that crap evaporates? Nice option to have.
Almost all of these countries/regions are in some form of recession with the exception of the ME which is too small to make up any demand.
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
Care to guess how many sets of books the Fed keeps?
Oh, yeah we'll never know we can't look at the books. We only hear what they tell us.