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Federal Reserve Balance Sheet Update: Week Of September 16
Total Federal Reserve balance sheet assets for the week of September 16 of $2,101 billion ($30.7 billion higher compared to the prior week's $2,071 bn), just $73 billion shy of the all time high of $2,174 billion recorded on April 22, consisting of:
- Securities held outright: $1,533 billion
(an increase of $83.9 billion MoM, resulting from $27 billion in new
Treasury purchases, $43.7 billion increase in MBS and $13.2 billion in Agency Debt), or $31.3 billion increase sequentially - Net borrowings: $320.3 billion: H.3 number had not been updated as of this posting
- Float, liquidity swaps, Maiden Lane and other assets: $248.3
billion,
a $659 million decrease based on a 2.3 billion reduction in CPFF and a $506 million reduction in liquidity swaps.
Foreign holdings increased by $16.7 billion.
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"just $73 billion shy of the all time high"
So much for deleveraging...
well, it looks like we won't have to worry about the Fed increasing its balance sheet for the FHA. All along, I have said that the FHA will implode. According to the agency's director as reported this a.m., I am woefully wrong:
"Pressure from loan defaults has pushed cash reserves at the Federal Housing Administration below mandated minimum levels, but the agency's head says taxpayers won't be asked to make up the difference. "
I am so relieved, will be able to sleep better tonight with his reassurance. Oh btw, FHA delinquent loans are somewhere north of 15%.
yep.....this is a disaster just waiting to happen.
all the scumbag mort brokers/mort bankers have simply left the new century, indymac, american home loan, ad infinitum platforms and gone directly to FHA.
Come on now, Deadhead - we're not all scumbags. As a 23 year - in the business - good guy, I can tell you that a lot of those scumbags have left the business. The scumbags that are left, along with goodguys like me have moved to FHA financing, though. It's just about the only financing product left for homeowners/buyers. And everyone is playing by the rules, as lenders won't approve a loan any other way - they don't want to get stuck with an "unsaleable" loan. That being said, IMHO, the underwriting guidelines for FHA are totally inappropriate for this market (read too easy). Have a nice day!
village...for the record, i did not say all brokers are scumbags....re-read my words, please. i said "all the scumbags"....
last 8 yrs of my career were at a big, big title cos and 90% of my time was selling to big banks and mort bankers/brokers....I agree that there are some good ones out there, but must of them are pretty bad and have little to no concern over providing approriate advice to borrowers. glad to hear that you are good one and your incredible longevity goes to that point.
i've hear that some DU programs somehow are allowing >40 or 50% dti deals through. anyways, we certainly agree that und. g'lines for FHA are inappropriate, particularly down payment at 3.5....hell, a borrower has no skin in the game with the obama tax credit and for that matter, FHA has a real LTV probably with that as well as taking into consideration a realtor commission. or lawyer fees etc on the eventual f'closure of many of these deals.
Amazing to hear CNBS pumping the homebuilders (not to mention everything else) this AM. More GS pumps.
JPM. Same church, wrong tentacle.
i wish i had a dollar for every time i've seen Toll's name on the insider selling reports since earlier this year.
Just curious...
Do you go by "the rules"?
Or do you go by "your standards"?
I think the bigger point is, without being required to retain ANY credit risk, the entire mortgage origination market could care less about the loans they are underwriting. The originate and securitize market is far from dead, it has just shifted to the govt either directly through FHA or indirectly through Fannie/Freddie.
Look at what you said - no lender wants to get stuck with an unsaleable. i.e. no lender wants to originate a loan they are going to have to own themselves, and they are originating junk they would never hold on their balance sheet.
It is a disaster in the making.
Don't forget Golden West. I've had an account with Wachovia since I was 10, so everything that unfolded there really broke my heart. Plus in a former life I knew a son of West's CEO. Kids a sociopath. Something about apples and trees ya know.
Mr. Bernanke and the "Classics"...
Were the exhortations to consumption, of Mr. Spence and others, addressed only to individuals, we might listen to them with a great deal of indifference; as we might trust with abundant confidence that the disposition in mankind to save and to better their condition would easily prevail over any speculative opinion, and be even little affected by its practical influence. When the same advice, however, is offered to government, the case is widely and awfully changed. Here the disposition is not to save but to expend. The tendency in national affairs to improve, by the disposition in individuals to save and to better their condition, here finds its chief counteraction. […] One of the most powerful restraints upon the prodigal inclinations of governments, is the condemnation with which expence, at least beyond the received ideas of propriety, is sure to be viewed by the people. But should this restraint be taken off, should the disposition of government to spend become heated by an opinion that it is right to spend, and should this be still farther inflamed by the assurance that it will by the people also be deemed right in their government to expend, no bounds would then be set to the consumption of the annual produce. Such a delusion could not certainly last long: but even its partial operation, and that but for a short time, might be productive of the most baneful consequences.
[…] It might be not useless to those who are the most averse to hear of the fact, barely to allow themselves for one moment to suppose it real, and then to ask themselves, whether it ought to be disguised or to be made known; whether the fatal cause is most likely to be removed by concealment or by exposure.
James Mill, Of the National Debt, in: Commerce defended (1808).
I'm just speachless at the ubsurdity of these poeple (Bloomberg used to be ok, but it's clear they have gone full retard ala marketwatch and CNBS). Are they really this out of touch? Headline on BoobBerg:
Gain in U.S. Household Wealth Will Help Ease Strain on Spending
Share | Email | Print | A A A
By Bob Willis
Sept. 18 (Bloomberg) -- Household wealth in the U.S. increased by $2 trillion in the second quarter, a first step in restoring Americans’ finances and spending power.
Ya, this was totally bizarre. I went looking for coverage of this last night, and all of the headlines were practically identical. Gah.
I've been in the deflation camp for a while :eeK:
But more & more I'm starting to lean into !"The Turkey model" of creating a new
Currancy based on the old one. 1.25 million old lira = 1 "new" Turkish lira
UK did it in the 1970's, (decimalisation) Euro land did it with the 1999 Euro & Iceland is moving towards the Euro.
Its the right time frame for a "new" Dollar as its lasted longer then the normal fiat models since its last "change" in the 1970's with Nixon.
Something is going to have to happen with currencies around the worls. Not sure if we will wind up with the Amero, but i would not be surprised to see something drastically change in the future.
The amero conspiracy drives me crazy. The thing that no one who adheres to it can adequately explain is "what good would it do". So you change the name of the fiat currency and maybe put a new picture on it, but it's still a piece of paper that represents a medium of exchange. Again, what's the point?
The sheeple will be convinced that the fundamentals are refreshed for the new currency and that it will be stable. This will allow for government to steal through another slow inflationary process until it starts over. Same beast, different name, stupid people.
The point as always is who controls the new medium of exchange, not the fact that a new fiat currency is being created.
As any kindergarten school graduate knows, the US dollar has lost more than 96% of it's value since 1913. And god knows the Vampire Squid is doing its best to devalue the dollar to less than that excreted by a fly's ass, fromally known as a fly speck.
Now same said Federal Reserve prints a large denominational note in limited quantity only to be used between the Vampire Squid and its clearing houses thereby guaranteeing that same said note does not become devalued, while you swim in notes who's only use is to burn as cordwood, a la Zimbabwe.
As the new notes retain value, the unwashed masses are driven to the new medium of exchange through propaganda and brainwashing through the planned breakdown in the US dollar as a world reserve currency. This has been postulated by many goldbugs such as Deepcastor.
Will it take time, yes, because first you have to break the spirit of those scurrilous dogs that cling to their god, their bible, their guns, and their ZH website, formally known as patriotic and Liberty loving Americans.
When trying to form a more corrupted perfect union, soon to be known as the North American Union, a new fiat currency will be needed for use as a medium of exchange between Canada, the US, and Mexico, and issued by none other than.....well who prints that goddamn crap now!
The NWO has been in the execution stage for quite a while now:
http://www.bibliotecapleyades.net/sociopolitica/esp_sociopol_nwo06.htm
http://www.bibliotecapleyades.net/esp_sociopol_nwo.htm#inicio
More grist for the mill, or just an hallucinogenic trip down conspiracy lane?
Not an AlexJones/InfoWars botard, just found the info entertaining.
wtf...now the dolalr is higher, and stocks still go up! this perma-bi market is getting old quick. in the last 22 trading sessions we've only had 2 drops over .3%! and in that period we've risen just over 8% in the S&P...wow
yes a new currency is coming...one day we will wake up and our savings will be cut in half just like Argentina did earlier in the decade.
Agreed. IF your savings are in dollars.
where are the maiden lane assets going?
"just $73 billion shy of the all time high of $2,174 billion recorded on April 22"
woohoo..a lower high...the trend is down. lol
Yes and we could also then recycle all the 100 trillion Zimbabwean dollar notes for sale on EBay and stamp them "One US New Dollar"! From the pioneer of QE Gono obviously Bernahke's role model.
Looks like Half Dome at Yosemite!
more like a cross section of the Yellowstone Caldera and all that that implies
I've looked at your xrays and it very clearly shows a cancerous growth of ginormous proportions.
Questions for Deadhead:
So, you worked for big title insurance companies. Are they not the premier rip-off artists in America?
How come title insurance does not exist in Iowa?
How come title insurance does not exist in Europe?
Who does title insurance protect?
Why is it needed everytime a property is re-fied?
Regards,
baldski
1. premier rip off artists.....no not at all. the b'ness model is incredibly simple, very boring, plain vanilla. the only thing i've experienced on the rip off front is that some states have high premiums (ny and texas come to mind). if you have examples or other specifics, please reply and i will respond frankly based on my experience.
2. iowa....little rusty here but my recall is that iowa decided to self insure through the state gov't, much like some municipalities set up their own power utilities.
3. europe..title ins. does exist in europe. the larger american companies moved into those markets several yrs ago....i know stewart and first american are there for sure, prob. fidelity as well. great britain, poland come to mind off the bat.
4. protection...2 policies, owner's and lender's. lender's policy protects the lender and is always paid by borrower in residential transaction (negotiable in commercial deals). owner's policy protects the property owner and is paid for by owner. penetration of owner's policies varies widely across the country due to parochial real estate customs.
5. it is needed everytime a refi occurs for essentially 2 basic reasons....if a different lender, that lender wants to be insured vs the previous lender and wants to be insured throughout the gap that occurred between the original loan and the new loan. if same lender refi, that same lender wants to be insured between the original loan and the new loan. stuff happens between loans, i.e. judgements, failures of prior searches discovered on new searches, etc.
more questions? please let me know, i'll check back.
I think the question on the refis was why does the borrower have to pay a full-freight premium everytime it refies. If the title was clean on the first go, a simple search for any liens attached since the first go shouldn't cost as much as the initial search.
Haven't looked at it in a while, but the refi rate SHOULD be lower than the first, but this only happened after several states (and possibly the Feds) sued the title companies.
Further, with the automation in state/county record offices, conducting title searches is much simpler these days.
Also, title companies did get sued by several states for their "title captive" kickbacks with the lenders.
Title insurance is a rip-off. Not saying it isn't necessary, but not at the rates they charge.
across the board, refi rates are lower because the states have taken action. the title companies pretty much give out the refi rate automatically. if i was a borrower, i would certainly double check that.
automation of searches...depends on where you are in the usa...cali is just about all automatic....in new york, there are still many counties where a non computerized search doesn't cover everything and people still run around county clerk's offices pulling books and photocopying crap for title examiners.
on the kickbacks et al, those are illegal (governed by HUD for the most part) but it did not directly impact the consumer, i.e. the premium wasn't increased for the consumer, it's just that the title companies were knocking each other out to garner market share and were giving back premium to the referring entity. in many ways this is no different than a company that will sell widgets for a list price but will give you a discount if you buy alot of them on an ongoing basis. happens to be illegal in the title biz.
as said before on rates, depends on the state. I remember having a couple of large commercial deals in Illinois (chicago area) and the rates are so low that it was pathetic in terms of profitability.
What about the $10 to $15 trillion in 'off the books' spending by the Fed (according to Bloomberg)? Off the books would not be reflected in any balance sheet. I am misinterpreting what Bloomberg reported?
Another graph. Ouch.
http://research.stlouisfed.org/fred2/series/CURRCIR
Does MBS (the brick color in above graph) stand for Mortgage Backed Securities? Looks like its getting very large.
I have a question regarding the September 30th deadline for Basel II and III compliance and the Fed's Balance Sheet. I have read that inorder to be Basel II and III compliant the banks will have to bring in off-balance sheet assets that could cause an implosion of bank balance and reserve sheets. It is my understanding that Basel II and III banks will not be allowed to do business with banks that are not compliant, is all of this correct so far? Do you think that the banks will actually comply? Or do US banks have an out with claims that lying about their balance sheets are in the nations interest? Any thoughts?
i have not read enough about Basel (shame on me)....as to the off balance sheet items for usa domiciled banks, the FASB has already instituted rules (i think covered under fasb fas 166, 167) that these spv/spe critters must come back on commencing jan 2010. this is a major problem for the banks. the amer. banker's assoc. is working VERY hard to undo this requirement, probably their number one priority. so far the fasb has not yielded. in this regard the FDIC recently has a proposed rule thingee out there for comments as to how to handle the necessary capital increases that this will require. this is a biggie for banks, naturally no main stream coverage.
http://www.www.basel-2.org/Basel_3.html
thank you gilga, much appreciated! in my favorites and it will be on my weekend reading list.
Another 25B of new dollars printed this week to buy agency MBS.
http://www.ny.frb.org/markets/mbs/
Thanks for screwing the value of our currency, Bernanke, hope you rot in hell.
I guess things are getting so much better that the Fed can reduce its balance sheet. Oh, wait...
Let Rep. Pete Stark solve the FED's toxic asset problem "the more we print the wealthier we are":
http://www.youtube.com/watch?v=UjbPZAMked0
If you don't like that, "you can get the f**k out or I'll throw you out the window".