Federal Reserve Balance Sheet Update: Week Of September 2
Total Federal Reserve balance sheet assets for the week of September 2 of $2,070 billion ($20 billion higher compared to the prior week's $2,049) consisting of:
- Securities held outright: $1,491 billion (an increase of $136 billion MoM, resulting from $43.7 billion in new Treasury purchases, $81.4 billion increase in MBS and $11.4 billion in Agency Debt), or $11.7 billion increase sequentially
- Net borrowings: $327.6 billion, no change from the prior week as number updated biweekly
- Float, liquidity swaps, Maiden Lane and other assets: $251.4 billion, an $8 billion increase on a continued $4 billion reduction in CPFF (an issue discussed previously on Zero Hedge) however liquidity swaps as expected, have bottomed and last week were increased by $3 billion to $63 billion.
Foreign holdings increased by $6 billion to $2,832 billion. Foreign holdings continue to lag the Fed's own purchases of US securities.
Another useful representation of the Fed's balance sheet expansion is the comparison of the Total Fed Balance Sheet to the Monetary Base (as disclosed). What is interesting is that while the ratio has historically been 1.0x, it briefly touched a high of 1.6x once the liquidity spigot was turned on Max, but has since stabilized and is hugging the 1.2x ratio. This indicates that in terms of pure monetary impact on circulating money, the Fed is now running at about 80% efficiency on its Balance Sheet expansion, whereas prior to Lehman this was roughly at 100%, as expected. The 20% shortfall is curious, and begs the question whether it is all due to excess depository reserves being stuck at banks instead of being lent out, or if there is something more structurally flawed at play.
(4 votes)
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on Fri, 09/04/2009 - 09:17
#58648
Seems too steady to be random. This is somebody's model at work.
on Fri, 09/04/2009 - 09:21
#58655
This still doesn't answer the basic questions of if foreign holdings are 2.8 trillion and 4 trillion of debt is from raping medicare and social security then that leaves 6.8 trillion. Where's the rest of the 11.8 trillion dollar deficit and who's holding it. Who's got the 5 trillion dollar pimp hand.
on Fri, 09/04/2009 - 09:29
#58664
It may be too early to rule out 'structurally flawed'.
I can see Ben sitting with his calculator, some test tubes and a calorimeter muttering to himself 'energy in consistently higher than energy out, what on earth is going on here?'
That would be your financial entropy Ben. It happens when any stuff goes from A to B.
"And If you look, you will not find me..."
- Primer.
on Fri, 09/04/2009 - 09:54
#58697
"Friktion? Was ist das?"
on Fri, 09/04/2009 - 11:15
#58865
I think the last time someone had to solve the "energy out is less than energy in" problem they invented a new particle. A neutrino, I think, which may have some analogous application here since its existence was very difficult to detect and took years to unravel and understand.
Particle physics does have practical applications!
on Fri, 09/04/2009 - 09:38
#58671
Does this include everything they've been buying since 9:50 this morning?
on Fri, 09/04/2009 - 09:57
#58700
When is the next report of that newly expanding "other" category due out?
on Sat, 09/05/2009 - 06:39
#59759
Is other where they have their stock holdings?
on Fri, 09/04/2009 - 09:58
#58703
"and begs the question whether it is all due to excess depository reserves being stuck at banks instead of being lent out,"
There is something screwy going on here. It has to do with daily reserve requirements. The excess depository reserves at these banks must not be a liability of the bank holding the reserves. That means that there is no interest being paid to the owner of the cash identified as excess depository reserves. If so, then the excess depository funds most likely are loaned to other banks with reserve requirement deficiencies, with interest being earned.
But all this above sounds like nonsense.
I believe that the excess depository reserves at these banks are being used to meet liquidity requirements of the bank holding the reserve. That is the only reason I can think of as to why the cash is out in the first place. No bank can borrow money and not lend it out. Unless it is free money and not considered a liability. (increasing liabilities increases the reserve requirement)
This sounds nuts also.
I must be missing something other than my mind.
on Fri, 09/04/2009 - 11:18
#58867
Maybe the Fed raised the Reserve Requirement without announcing it publicly. You can consistently say "the banks are unwilling to loan money" without anyone being the wiser. I think the Fed may be aware that a public announcement of raising the reserve requirement would have an immediate increase in the interest rate.
on Fri, 09/04/2009 - 10:15
#58731
This is a fascinating chart and ZH makes a good point about "the Fed is now running at about 80% efficiency on its Balance Sheet expansion".
What I wanna know, and has not been asked yet, is where are the 'Maiden Lane and Other Assets' going?
on Fri, 09/04/2009 - 12:21
#58783
I've said for a couple days that somehow the FED and Goldman and the other banks involved are simply converting the Lehman corpse into national debt. The banks will be made whole and all the responsibility will be put on a tax payer that will likely revolt once this gets more pay up or we bust your knee caps. Who knows they have thier tricks and they have thier straight out funnels of money. At some point a currency revalution MUST take place but probably has to be done forcefully and all the ducks are not in a row yet.
on Fri, 09/04/2009 - 10:36
#58779
At the top of the list - well, MY list anyway - is the question, "What entity was responsible for the "Electronic Run on the Banks"?
Months ago, the Thieves put Congress in a little room and threatened them with Death and Destruction and possibly even loss in the next round of Elections.
I have asked several of the respected Economic Bloggers if ANY information has been given that would answer the question. The best response I got was:
"Not a word."
Since then we have had Tron Town and maybe Alphaville but no explanations. If "Esse est percipi", then we've had a whole lot of "Percipi" and not a hell of a lot of "Esse".
Anybody seen Esse around here lately? How's she doin'?
CW
on Fri, 09/04/2009 - 11:03
#58843
It's sad to see a picture of me as a Bag Head. I forgot to sign in. More great quotes from the Greatest Philosophers coming soon!
CW
on Fri, 09/04/2009 - 11:18
#58866
Dead on. A simple question, never answered. Paulson is a lying thief, a Goldman mole through and through. Still waiting for the perp walk. A happy day.
on Fri, 09/04/2009 - 14:40
#59167
The hedfunds operate as the destructive portion of that cycle. Someone somehere had to pull thier call money out from under them and call in the loans. So basically if those were all in money market funds all they had to do was drain down the funds and it would automagically set off thier asset dump sellng spree.
I know one thng. The FED lied through it's teeth about it.
http://www.portfolio.com/views/blogs/market-movers/2009/02/11/kanjorski-...
Hard to say with all the HFT price floating but I don't see how you could have set off the massive redemptions and in such conrolled way over weeks without drawing down the hedgies accounts just right. We hit limit down on one day so someone got a bit carried away on the Japanese or European market but otherwise it was an orderly crashing. These days though you don't even need complicit players you just need the people to set up computer programs.
on Fri, 09/04/2009 - 10:58
#58827
http://www.marketoracle.co.uk/Article13223.html
on Fri, 09/04/2009 - 10:59
#58831
I think this article explains it:
http://www.marketoracle.co.uk/Article13223.html
on Fri, 09/04/2009 - 11:01
#58838
Rentenmarks for all.
on Fri, 09/04/2009 - 11:02
#58839
Sorry I posted the wrong article. See below
http://seekingalpha.com/article/159833-money-supply-the-myth-of-hyperinflation?source=email
on Fri, 09/04/2009 - 11:03
#58844
These graphs flattened out in December after the big spike. That spike is why the economy feels better today. But the flattness is going to show up soon. Without a constant increase this economy is going to sputter.
on Fri, 09/04/2009 - 11:12
#58854
Are the "so-called" Fed assets marked to market? lol
on Fri, 09/04/2009 - 12:05
#58935
Money Multiplier is still below one as of last check:
http://research.stlouisfed.org/fred2/series/MULT
on Fri, 09/04/2009 - 14:40
#59034
those numbers are staggering good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
on Fri, 09/04/2009 - 13:35
#59102
Crazy talk. My old boss wanted a 20% ROI. In this circle jerk money switcheroo game, one or more entity(ies)'s 20% operating expense is another(s)'s fee income (et al).
More crazy talk. Maybe that 20% leakage is the same number that shows up in bank earnings?
Told you, crazy talk.
on Fri, 09/04/2009 - 14:34
#59158
I think you may have hit linkup. The banks are charging the FED 20 percent to run bonds and treasuries back and forth.
on Sat, 09/05/2009 - 00:30
#59689
Dear Tyler and Marla,
I'm not sure you will put up with this but, i declare to you, that i will repeat my same post over and over at least for awhile as my version of a hunger strike-- i may occasionally break my silence to bitch a little more, but seriously, i think the best and most i can say is in the post that i will post here, and i will post it again, obsessively, as a modern day hunger protest--no more posts except the one that really matters....love to all of my fellow posters and to you Tyler and Marla for moving the country to truth...yours truly,
Agrotera
Subject: BLACKHOLEBANKS
The really great thing would be for Sarbanes-Oxley to be used to throw in jail the heads of the TBTF since they signed off and made fortunes off of getting their crimes legalized, then pushing the limit, sold crap that they called AAA, then sold credit default swaps on top of it all...
1) Dedicate half of one of the least populated states for a new penitentiary to house the thousands of crooks that brought us the nuclear winter we are living though.
2)...ABOLISH THE FED MACHINE.
3) Use anti-trust laws to break up the "toobigtofail" ...
[and believe me, Goldman Sachs and Morgan would have been OUT if they didn't win the Lehman bet, get free money through AIG's backdoor, a ban on short selling, and bank holding status to keep them afloat til the "secret Sat. meeting" where Paulson passed out money to his friends. (ALL THE WHILE, BOTH FIRMS HAD THEIR PR PEOPLE OUT IN FULL FORCE CLAIMING THAT THEY DIDNT NEED THE MONEY...HAHAHAHAHAHAHAHAHAHAHHAHAHAHAHAHAHAHAHAHAHAH)]
4) HELP of some sort for all US citizens and many countries around the world since every citizen is effected by this fraud...
BOTTOM LINE WE MIGHT HAVE BEEN ALMOST IN THE HOLE AS MUCH AS WE ARE NOW, BUT IT WOULD HAVE BEEN FOR RIGHTEOUS REASONS INSTEAD OF THIEVERY--THE WHOLE WORLD KNOWS WHAT CRIME IS GOING ON HERE IN AMERICA, AND IT IS HIGH TIME WE CALL BACK THE STOLEN MONEY, TAKE APART THE TOOBIGTOFAIL(TBTF), ABOLISH THE FED, AND SEND IN A NEW FRESH GROUP OF UNPURCHASED ELECTED OFFICIALS TO WASHINGTON WHO WILL LEGISLATE ON BEHALF OF THE PEOPLE INSTEAD OF ON BEHALF OF THE FED MACHINE.
the TBTF are BLACKHOLEBANKS...
reminds me of an old favorite: http://www.youtube.com/watch?v=UtzsXMV5ve4