Excess Reserves

Tyler Durden's picture

5 Things To Ponder: GDP, Dollar And Subprime





If you had fallen asleep at your desk recently due to the absolute lack of anything noteworthy happening, this past week should have woken you up. A massive upset in the Virginia primary dethroned House Majority Leader Eric Cantor which sent moderate Republicans scurrying to shore up their voting bases. Al-Queda backed forces, ISIS, have advanced through Iraq and are not closing in on Baghdad which has sent oil prices rocketing higher this past week. Lastly, the mainstream media was completely baffled by the "sea of red" on their monitors which caused one anchor to quip: "Wow...stocks really can go down."

 
Tyler Durden's picture

Giant Sucking Sound: Russian Money Yanked From US Banks





US Banks enjoyed more or less steadily climbing, or rather soaring, deposits by Russian institutions and individuals, having tripled in just two years to $21.6 billion by February, according to the US Treasury... and then March hit... boomerang

 
Tyler Durden's picture

Here Comes QE In Financial Drag: Draghi's New ABCP Monetization Ploy





You can smell this one coming a mile away... the ECB is now energetically trying to revive the a market for asset-backed commercial paper (ABCP) - the very kind of “toxic-waste” that allegedly nearly took down the financial system during the panic of September 2008. The ECB would have you believe that getting more “liquidity” into the bank loan market for such things as credit card advances, auto paper and small business loans will somehow cause Europe’s debt-besotted businesses and consumers to start borrowing again - thereby reversing the mild (and constructive) trend toward debt reduction that has caused euro area bank loans to decline by about 3% over the past year. What they are really up to, however, is money-printing and snookering the German sound money camp.

 
Tyler Durden's picture

Fed Governor Admits Truth About QE: "Can't Go From Wild Turkey To Cold Turkey Overnight"





“I am often asked why I do not support a more rapid deceleration of our purchases, given my agnosticism about their effectiveness and my concern that they might well be leading to froth in certain segments of the financial markets. The answer is an admission of reality: We juiced the trading and risk markets so extensively that they became somewhat addicted to our accommodation of their needs… you can’t go from Wild Turkey to cold turkey overnight."

- Fed Governor Richard Fisher

 
testosteronepit's picture

When $1.2 Trillion In Foreign ‘Hot Money’ Parked At The Fed Dissipates





Fits the pattern of gratuitous bank enrichment perfectly. But this time, the beneficiaries of the Fed are foreign banks.

 
Tyler Durden's picture

Former San Fran Fed Employee Threatened To Murder Ex-FHFA Head Ed DeMarco





When it comes to the San Francisco Fed, it is best known throughout the financial community as the group of crack economists who spend millions of taxpayer funds to investigate such probing, for kindergarteners at least, topics as: is water wet, do trees make a sound when they fall in the forest, is it still worth going to college, and are hedge funds important in a crisis. Little did we know that, at least some of them, are homicidal psychopaths with suicidal tendencies. Because this is precisely what was revealed moments ago when Bloomberg reported that the chief operating officer of the Federal Housing Finance Agency and 26-year San Fran Fed veteran, Richard Hornsby, is facing a felony charge for threatening to kill the agency’s former top official, Ed DeMarco, and then kill himself.

 
Tyler Durden's picture

Is The Fed Fabricating Loan Creation Data?





It wouldn't be the first time the Fed has "stretched" the truth...

 
Tyler Durden's picture

Behind The Fed's Monetary Curtain: Wizards? Or Scarecrows Who "Do An Awful Lot Of Talking"





On the 'growth' side, Commercial and Industrial loans are rising at a double digit annual rate of change (although it is unclear whether this is an indication of business optimism or stress - after all, we did see a big jump in these loans leading into the last recession).  On the flip side, the bond market and the US dollar index seem to be flashing some warning signs about future growth. Simply put, the outlook for the economy is decidedly uncertain right now and we think so is the confidence in Janet Yellen. We think the more dire outcome for stocks would be if Toto fully pulled back the curtain on monetary policy and revealed it to be nothing more than a bunch clueless economists sitting in a conference room with no ability to control the economy or the markets. If US growth disappoints after all the Fed has done, how could anyone continue to view the Fed wizards as omnipotent? That would send the stock market back over the rainbow to the reality of an economy with big structural problems that can only be solved through political negotiation, something that has been notable only by its absence over – at least – the last 6 years. Are we headed back to Kansas?

 
Tyler Durden's picture

Overnight Pump (Then Dump) - Day 6





By this point, one has to be impressed at the resilience with which algos repeat the same pattern over and over again, hoping for a different outcome. It is now the 6th day in a row that the JPY-carry trade (be it USDJPY, EURJPY or AUDJPY) driven levitation has pushed equity futures smartly up in overnight trading. And by all accounts - in the absence of ugly macro news which in today's sparse data line up (just Personal Income and Spending and UMich consumer condfidence) - the same post early highs fade we have seen every day in the past week will repeat again. The overnight euphoria was driven primarily by Europe where Bloomberg reported 2 Year Spanish yields have traded below those of the UK for the first time since 2009. And since it is obviously not the strong fundamentals, what is continuing to happen, as has been the case since October 2013, is everyone is pricing in the ECB's QE, which even Weidmann is openly talkin about  now, which simply means it will most likely never actually happen, certainly not until it is too late.

 
Tyler Durden's picture

Message To The Fed: Here Are A Few Things That You Can't Do





It’s evident that the economy isn’t growing strongly because of conditions that central bankers themselves created, by encouraging excessive borrowing and disregarding moral hazard. In other words, the problem isn’t so much that the Fed can’t deliver another debt-fueled boom, but that it shouldn’t be trying to cure a credit bust with more borrowing in the first place. Sadly, though, this idea falls in the same category as the notion that the Fed’s balance sheet isn’t the right tool for job creation. It’s too damning a thought to be accepted by central bankers who’ve shackled themselves to a philosophy of ceaseless intervention. It’s also too basic for economists who prefer abstract theories and mathematical models over reality-based thinking.

 
Tyler Durden's picture

The Stunning History Of "All Cash" Home Purchases In The US





Yesterday's news from the NAR that in February all cash transactions accounted for 35% of all existing home purchases, up from 33% in January, not to mention that 73% of speculators paid "all cash", caught some by surprise. But what this data ignores are new home purchases, where while single-family sales have been muted as expected considering the plunge in mortgage applications, multi-family unit growth - where investors hope to play the tail end of the popping rental bubble - has been stunning, and where multi-fam permits have soared to the highest since 2008. So how does the history of "all cash" home purchases in the US look before and after the arrival of the 2008 post-Lehman "New Normal." The answer is shown in the chart below.

 
Tyler Durden's picture

Futures Fail To Rally On Lack Of Yen Carry Levitation





Stocks in Europe failed to hold onto early gains and gradually moved into negative territory, albeit minor, as concerns over money markets in China gathered attention yet again after benchmark rates fell to lowest since May 2012. Nevertheless, basic materials outperformed on the sector breakdown, as energy and metal prices rebounded following yesterday’s weaker than expected Chinese data inspired sell off. At the same time, Bunds remained supported by the cautious sentiment, while EUR/USD came under pressure following comments by ECB's Constancio who said that financial markets misinterpreted us a little, can still cut rates and implement QE or buy assets. Going forward, market participants will get to digest the release of the weekly API report after the closing bell on Wall Street and the US Treasury will kick off this week’s issuance with a sale of USD 30bln in 3y notes.

 
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