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Federal Reserve Balance Sheet Update: Week Of July 29
Total Federal Reserve balance sheet assets for the week of July 29 of $2,011 billion consisting of:
- Securities held outright: $1,343 billion
(an increase of $125 billion MoM, resulting from $47.5 billion in new
Treasury purchases and a $77.4 billion increase in Fed Agency Debt - this is the most rapid increase in monthly MBS purchases since March) - Net borrowings: $347 billion (a decline of $57 billion month over month)
- Float, liquidity swaps, Maiden Lane and other assets: $320 billion
(decrease of $49 billion month over month due to a continued reduction in Central Bank
Liquidity Swaps ($28 billion) and $25 billion in CPFF outstandings). - Foreign central bank liquidity swaps are notable as they are at the lowest level since the Lehman bankruptcy ($88 billion), and presumably a good indicator on future dollar value manipulation capacity by the Fed. The rate of decline over the past week was the lowest since the metric commenced declining, and has been correlating closely with a declining dollar: this implies the Federal Reserve's toolkit to implicitly weaken the dollar is running out of options as the Liquidity Swap gets closer to zero.
Foreign holdings of USTs and Agencies increased by a meager $27.4 billion monthly to $2,793 billion from $2,766 billion in the prior month. This is roughly 20% of the comparable increase in Securities Held Outright by the Federal Reserve.
The Federal Reserve's Monetary Base was at $1,663 billion, indicating the flat/declining trend YTD
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Phew....I'm sure glad that we aren't monetizing debt. I was a little worried there for awhile.
Wonder what an audit would reveal? This report is BS until proven otherwise.
Are there other lies you can point to?
The Fed seems very comfortable saying nothing when it wants to, I don't understand why people feel they have a need to lie.
Then why would they be so worried about an audit? If your brain was larger than a peanut you would have figured this out by now for yourself...your welcome.
I dub thee 'Ben the Monetizer'.
S. Korean FX officials were buying the USD yesterday in an attempt to stem the weakness that was causing Won strength. Today they will be asking for more feathers to stop the avalanche on Mount St Helens.
And this is the best the Fed can do in its attempt to paint the best picture possible? No doubt that the Fed's options at propping up the dollar are indeed rapidly approaching zero.. This as speculation builds over the perceived over valuation of the Euro & Pound vs the Dollar may beget another race to the bottom. Anyone else smell more that the initial whiff from Ackermann today?
The Fed have been weakening the dollar - its what they want!
All those swap lines prevented the DXY shooting through 100. The Fed are not propping up the dollar. The markets have been doing that in an attempt to pay down debt.
Currently we have a bout of irrational exuberence as suckers buy into greenshoots and REFLATION. Wont happen. And the demand for dollars will reknew. You realise Chinas Yuan money growth is 28% y-o-y. What you think is going to happen when the Chinese asset bubble blows up?
To the best of my understanding a currency devaluation is the functional equivalent to an interest rate cut. So the Fed def wants the dollar to go down (so much for price stability), bu they don't want to do it in a way that makes it look like beggar thy neighbor. So obfuscation is the name of the game.
And what happens when the China bubble blows up? Lets ask Leeloo from the 5th Element what she thinks:
http://datacore.sciflicks.com/the_fifth_element/sounds/the_fifth_element_badaboom.wav
Indeed
"Luccy, you got some splaining to do!"
Headlines read:
Deflation to the left (Japan)
Deflation to the right (Europe)
How in the world is the dollar supposed to depreciate?
If only the BB and CNBC would start playing that as their theme music...they would be taken more serious.
Bada boom.....Big bada boom
I guess we know where the demand for the 7 yr's came from.
"Foreign holdings of USTs and Agencies increased by a meager $27.4 billion monthly to $2,793 billion from $2,766 billion in the prior month."
Whose buying it then? The banks with the bailout money? I want to be "loaned" $1b and buy 12mo bills with a .5% yield.
don't forget some of the banks are paying 5% on the tarp loans...
be assured the fed aint trying to "prop up" the dollar - quite the opposite. The measure of central banking success today is how much they can devalue their currency and still have it generally accepted. The successful one will avoid the Japanese trap of a decade long deflation.
Hence the decidedly Orwellian quote we've been hearing from Bernanke: "We think the dollar should be strong, and the best way we think to get a strong dollar is to have a strong economy."
Well, that's probably not much of a factor.
At least in Q2, we have pulled the nose up to a gentle decline, rather than the screaming vertical dive of Q4/Q1.
*Flight plan subject to revision. Please continue to use the oxygen masks, and keep all trays in the upright position.
Monetizing the debt would be fine if we were spending the money in a way to generate money in the future. We are not. None of the Goldman Sachs crowd is going to take their paychecks and start a company in the US that will create jobs in the US. Mr. Obama is just as bad if not worse than Mr. Bush at spending money with little thought to where the new money is going to come from. If there was a change at Goldman Sachs and all of the sudden they were paying a 50% nominal tax rate then wow we know change is really coming.
Mr. Obama hasn't change much at all, he is just a lot better at speeches than Mr. Bush.
Same lies, better liar.
presuming we can grow at a sufficient rate to service the debt... multiplier at 1 doesn't help much either.
$6 of debt for every $1 in GDP growth. And getting worse (according to KD)
So no, we probably can't grow to service the debt, but like California, we can probably shrink a bunch of stuff.
"Monetizing the debt would be fine if we were spending the money in a way to generate money in the future."
Amen! If the Fed were opening up malt shops, FINE!
When you print money, those closest to the source always benefit the most.
The currency swaps weaken the dollar, as it obviates the need for foreign central banks (or more correctly the companies they serve) to head into the market looking for US currency. Before the swap program started, the dollar was soaring, as were LIBOR $ rates. The swaps brought down both $ LIBOR and the dollar.
Thus, I prefer to go long the dollar here, especially against the Euro.
The race to deliver the enhanced risk appetite while driving enough of the market to prop up the treasury & fed. Loan loses in the euro zone as indicated by Ackermann may be the catalyst. Let's see what happens in CCE and the PIIGS along with a potential decreased Chinese government sponsored loan appetite for a commodity boom supporting the Ausie.
Interesting times...
WSJ had a decent story this morning about the extent to which China participated in the bond sales this week.
Looks like Geithner's exceptional sales skills are not merely limited to his failing to get off his house.
http://online.wsj.com/article/SB124896282178793797.html
http://s.wsj.net/public/resources/images/OB-ED912_credle_D_2009073021462...
Is it just me, or is turbo tim taking a whizz on the steps before the Chinese arrive?
Confucius say- Man in hurry to take whizz going to Bangkok.
I would say that's he doing it awfully close to the American flag...
Hey deadhead. Is there a thread you are not the first to comment on???
Yes. Most of them.
next question.
Huh? I don't know why this inaccurate argument keeps showing up on here. Central bank swaps have nothing to do with some attempt by the Fed to weaken the dollar. It was to keep us from entering the economic stone age.
Sure it does.
Allows Foreign Central banks to bypass the interbank market to purchase dollars, otherwise they would have to devalue their currency to buy dollars.
Helps manipulate exchange rates to give FCB artificial purchasing power.
Huh? The dollar was soaring due to lack of supply, it was definitely to supply dollars, which weakened the dollar.
Right. We loaned them dollars they didn't have.
If they don't have to borrow them from the market, you cutoff the "ask" from the market. After the swaps were in place, the dollar weakened back to a central rate. Any shortfalls will have to be issued through the bond market, which I assume is a placeholder in the stimulus, budget, healthcare, whatever crazy ass bill comes next.
WTF are you talking about? There was no interbank market when the Fed extended swaps. You don't get it. It was end of the world financial armageddon. Why do you think the Fed had to extend the swaps? You are using circular reasoning that isn't grounded in fact. You don't know what you are talking about. Go fake it with someone who doesn't understand what was going on.
Pound Sterling is da best - say - Fitchhie - AAA no less. Phew - that was close.
the more things change the more they stay the same. here is some footage of outraged congressmen after LTCM blowup. it is from the Nova's "Trillion Dollar Bet".
http://www.youtube.com/watch?v=G17rx7H3DtI&feature=channel_page
(Foreign Bank X) - Hmm, I don't like the strength of our currency against the USD. Let me just step and purchase some $Billions of Dollars...
And, it gone...
http://www.goldseek.com/quotes/charts/usdollar/usdollarindex24hour.php
Absolutely normal.
Remarkable bird, the N̶o̶r̶w̶e̶g̶i̶a̶n̶ ̶B̶l̶u̶e̶ American Fed.