Excess Reserves

Tyler Durden's picture

"Ugly Outcomes" Loom As Fed Suppression Forces Long Term Economic Repression





The Federal Reserve has created a semblance of normality, but by suppressing interest rates they have enabled non-linear, and very possible ugly outcomes, to become entrenched in US public debt dynamics. The euro crisis from 2010 to this day show how difficult it can be to regain investor trust when the unsustainability is first revealed for all to see.

 
Tyler Durden's picture

Fed Worries About Deflation But Pays Banks Billions Not To Lend QE Proceeds!?





In a world in which growth is slowing, is it not strange that the Fed (privately owned by the largest banks in the world) would institute a system of rising payments rewarding banks for not taking risk or lending money!  This all tends to make believe that manipulation is the order of the day and the explanation is far simpler than most would believe...

 
Tyler Durden's picture

Liquidity Problems? Deutsche Bank Offers 5% Yields If Depositors Lock Up Their Money For Three Months





We were surprised to find that in a promotional offer by Europe's biggest (and by many accounts most insolvent) bank, Germany's Deutsche Bank is not only not rushing to penalize depositors, on the contrary it is offering its Belgian clients a 5% gross return for new €10,000 - €50,000 deposits if this money is locked up for the next three months. The offer is only valid for the next 40 days, until June 24.

 
Tyler Durden's picture

What Manipulation Does To The Free Market





Had the federal government held a constant measuring stick rather than "tinkering, engineering, distorting" key government calculations such as the size of the economy (GDP), the rate of inflation, level of unemployment, or size of federal deficits and federal debt...the reality we face would be plain and honest choices needed.  Instead, the responsibility of those working for "the people" has been breached via falsifying and distorting each of these (over decades).  This consistently improves the output and does not allow a true means to quantify and qualify the nations health.  Simply put, the government has continually tinkered, tampered, and distorted the accounting so as to mislead or create a falsely positive appearance. 

 
Tyler Durden's picture

Trump's Right - Paying Back The National Debt With "Discounts" Is Already Official Policy





The establishment (and its mainstream media mouthpieces) proclaim that "confidence" is being threatened because Donald Trump has told the truth that the Federal debt is on a track toward unmanageability and default. Yes, Uncle Sam’s credit standing is in deep trouble and the Fed is heading for a monetary calamity. But these untoward prospects have nothing to do with a couple of alleged wild pitches from Donald Trump. Upon closer examination, it is evident that the Donald was actually right on the money.

 
Tyler Durden's picture

Former Fed Official Warns Of The Death Of The Fed Funds Market





“What this means for the Fed’s reaction function isn’t clear,” Pozsar concludes. “But our instinct tells us that we will deal with a Fed inherently more sensitive to global financial conditions, inherently more sensitive to global growth and inherently more dovish than in the past…Far be it from yours truly to worry. Still, it’s hard to take comfort in the knowledge that the Drano we’ve all come to know, though maybe not love, is now off the market.

 
Tyler Durden's picture

The Keynesian House Of Denial





The Eccles Building and its Washington/Wall Street acolytes have become a House of Keynesian Denial because the assumption that capitalism is an 80 pound recessionary weakling without the constant ministrations of the state is dead wrong.

 
Tyler Durden's picture

Shuffling The Deckchairs On The USS Perpetual Growth





The Fed Funds rate is functionally pointless now that Interest on Excess Reserves are higher and deposit rates are zero. The bottom line is that the Fed must keep asset prices up because assets are collateral for potentially deflationary systemic debt.

 

 
Tyler Durden's picture

The Path To The Final Crisis





We cannot be sure what shape the next crisis will take, although it seems likely that it will be yet another “deflation scare”, mainly caused by falling asset prices. However, we do know what the last crisis of the current system will look like. It will entail a crumbling of the public’s faith in fiat money and the institutions that issue and administer it.

 
Tyler Durden's picture

Month-End Market Weakness Looms As Monetary Base Trumps Buybacks





Regardless of which source ultimately proves more important, the below suggests that market liquidity tends to become more scarce around the end of the quarter at present. We have already seen this effect play out twice in row and it could well be that there will be another replay this quarter.

 
rcwhalen's picture

Fred Feldkamp: Donald Trump, Jesus Christ & Financial Stability





On Trump V. Clinton: "Bill Greider is correct and a very wise man... "

 
Tyler Durden's picture

Deutsche Bank: Negative Rates Confirm The Failure Of Globalization





"The demise of positive interest rates may be nothing more than the global economy reacting to a chronic oversupply of goods through the impact of globalization including the opening up of formerly closed economies as well as ongoing technological progress." - Deutsche Bank

 
Tyler Durden's picture

"There Is No Clear Way Out" - Richard Koo Says "The Price For QE Has Yet To Be Paid"





Recently, for example, the markets took a tumble when the Fed moved to normalize monetary policy. The US central bank responded by delaying the normalization process, which stabilized the markets, but eventually fears of falling behind the curve on inflation will force it to resume the process. That will lead to renewed market turmoil in a cycle that has the potential to repeat itself endlessly.

 
Tyler Durden's picture

German Banks Told To Start Hoarding Cash





This is officially an all-out revolution of the financial system where banks are now actively rebelling against the central bank. In a stunningly real rebuttal of Europe's negative interest rate policy, German newspaper Der Spiegel reported yesterday that the Bavarian Banking Association has recommended that its member banks start stockpiling PHYSICAL CASH.

 
Tyler Durden's picture

Most "Priced In" Policy Since 2011 - Why Draghi Better Not Disappoint





Mario Draghi better put up or shut up at the next ECB meeting as the market is more-than-pricing-in a very significant deposit rate cut (deeper into NIRP). In fact, at -56bps, 2Y German bond yields are the most "priced in" since 2011 (and bear in mind he disappointed in December).

 
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