Federal Reserve

EconMatters's picture

The Fed Has to Sell Treasury Holdings Back to Marketplace





Maybe overzealous bond investors might want to rethink that Yield Chasing Strategy for 2015. 

 
Tyler Durden's picture

The QE4 Countdown Has Begun





The head of the San Francisco Federal Reserve Bank on Tuesday said he would be open to another of round asset purchases if inflation trends were to fall significantly short of the U.S. central bank's target. Although he said it would take a big shift in the U.S. economic outlook for the Fed to restart its bond buying, John Williams said the possibility of a new downturn in Europe and other global economic woes pose a risk to the United States. "If we really get a sustained, disinflationary forecast ... then I think moving back to additional asset purchases in a situation like that should be something we should seriously consider," Williams said in an interview with Reuters.

 
Tyler Durden's picture

How To Blow Up OPEC In Three Easy Steps





We’ve landed in the next phase of what arguably started in 2007, but what you could place back many years before that, an economic system based on the fantasy that is debt driven growth, inflated by a factor of a trillion, give or take a few zeros.  That system is in the process of dying. And the people who have tried to make you believe, and succeeded, that it would all be fine in the end, are now jockeying for position in the aftermath of the demise of a world built on debt.  And they are the same people who built that world, profited from it to an insane degree, and want to use those profits to hang on to power in a world that will be dramatically different from the one they called the shots in. And that doesn’t bode well; it tells us violent clashes will be on the horizon.

 
Tyler Durden's picture

The Fed's 2% Inflation Target: The Ultimate Keynesian Con Job





The old adage that if something is repeated often enough it is soon assumed to be true couldn’t be more apt with respect to the Fed’s 2% inflation target.  That Keynesian central bankers peddle this nostrum with a straight face is amazing in itself, but it is at least understandable because it gives them a reason to keep the printing presses humming. That journalists repeat it with no questions asked is even more remarkable. It proves that the impending replacement of financial journalists with robo-writers may not be so bad after all. It won’t make any real difference.

 
Tyler Durden's picture

The Fate Of The "Free Market" Is In Their Hands





Of the 298 Bloomberg Terminal users that are currently registered with the New York Federal Reserve Board (according to Bloomberg Search), the great majority are "red" today - celebrating Indigenous People's Day we assume. However, while everyone's favorite "market intervenor" (sic), Kevin Henry, currently spearheading the NY Fed's Chicago office, remains "grey"- preferring not to share his status with the world after this - there are a few traders and analysts hard at work maintaining the status quo with "Trader/Analyst" Yan Chow appearing the most capable of holding up US stock markets without the aid of a bond market safety net.

 
Tyler Durden's picture

When Nothing Matters - Until It Does





A great many will rue the day when they bought into: “Pigs can fly,” “The markets are at these levels based on sound fundamentals,” “The Fed’s got their back,” and “Ebola is contained.” It is astounding just how far behind the curve many are finding themselves. Suddenly, almost everyone we meet is either doe-eyed, or worse, portraying signs of a deer stuck in the headlights. Today, everything is changing because the great masses whom many relate to as “the herd mentality” is now showing signs of great nervousness. And once this group gets spooked, it's over.

 
Marc To Market's picture

What is the US Position about the Strength of the Dollar?





While some are focused on the demise of the dollar, the fact is that it has been appreciating and this is causing some confusion.  See if this helps clarify what is happening. 

 
GoldCore's picture

U.S. and UK Test Big Bank Collapse - Risk Of Bail-ins





Regulators from the U.S. and the UK are in a “war room” today conducting financial war games to see if they can cope with fall-out when the next big bank collapses. "We are going to make sure that we can handle an institution that previously would have been regarded as too big to fail. We're confident that we now have choices that did not exist in the past," Osborne said at the International Monetary Fund's annual meeting.

 
Tyler Durden's picture

Will The Fed Let The Stock Market Crash Before An Election?





If central banks have learned anything since 2008, it's that waiting around for the panic to deepen is not a winning strategy. Put yourself in their shoes. Isn't this what you would do, given the dearth of alternatives and the very real risks of implosion? Anyone in their position with the tools at hand would not have any other real option other than to buy stocks in whatever quantity is needed to reverse the selling and blow the shorts out of the water. If $1 trillion doesn't do the job, make it $3 trillion, or $5 trillion. At this point, it doesn't really matter, does it?

 

 
Tyler Durden's picture

Key Events In The Coming Week





Today US activity will be very light given the Columbus Day holiday. As DB summarizes, we have a relatively quiet day for data watchers today but the calendar will pick up tomorrow and beyond with a big focus on inflation numbers amongst other things. Indeed tomorrow will see the release of Germany’s ZEW survey alongside CPI prints from the UK, France and Spain. Wednesday’s data highlights will include the US retail sales for September, the Fed’s Beige Book, CPI readings from China and Germany, US PPI, and the NY Fed Empire State survey. Draghi will speak twice on Wednesday which could also be a source for headlines. On Thursday, we will get Industrial Production stats and the Philly Fed Survey from the US on top of the usual weekly jobless claims. European CPI will also be released on Wednesday. We have the first reading of October’s UofM Consumer Sentiment on Friday along with US building permits/housing starts. Yellen’s speech at the Boston Fed Conference on Friday (entitled “Inequality of Economic Opportunity”) will also be closely followed.

 
Tyler Durden's picture

Why Everyone Should Be Watching PIMCO (In 2 Worrying Charts)





By now it is clear to everyone that the force-feeding of free-money into financial markets by The Fed et al. has led to a scale of financial repression never before witnessed as bond yields for even the riskiest of risky names collapse to record lows and cheap-financed share buybacks raise leverage to record highs and support an ever more fragile equity wealth creation machine. As Blackrock (and many others) have recently proclaimed, the corporate bond market is "broken" and the risk posed by investors trying to dump bonds is"percolating right under" the noses of regulators; so it is with grave concern we suggest the following two charts - showing the massive out-sized holdings of PIMCO's funds in the high-yield and emerging market debt markets leave a bond marketplace in fear that forced sales via redemptions are the straw that breaks the 'central bank omnipotence' narrative's back...

 
Tyler Durden's picture

A New Age Of IMF Bailouts – Great Britain In The 1970s





Hearing of IMF interventions generally conjures up images of developing nations (and the occasional Eurozone peripheral economy of late) facing some kind of financial difficulty. But it was actually Great Britain, the cradle of the industrialized world, which in 1976 became one of the first countries ever to be "bailed out" by the IMF in the modern sense of the term.

 
Tyler Durden's picture

Saxobank CIO Warns "The Narrative Of Central Bank Omnipotence Is Failing"





We have been discussing the widespread belief in "the narrative of central bank omnipotence" for a number of months (here and here most recently) as we noted "there are no more skeptics. To update Milton Friedman’s famous quote, we are all Bernankians now." So when Saxobank's CIO and Chief Economist Steen Jakobsen warns that "the mood has changed," and feedback from conference calls and speaking engagements tells him, there is a growing belief that the 'narrative of the central banks' is failing, we sit up and listen.

 
EconMatters's picture

The 5–Year Bond is Emblematic of Careless Risk Taking in Bond Markets





The difference between 2007 and today is back then these were largely sub-prime loans and overvalued real estate mortgages, vs, today's entire global bond market bubbles from Spain and Greece to the United States.  

 
Tyler Durden's picture

Monetary Policy And Impact On Assets





The last note briefly addressed the benefits associated with the reverse repurchase facility (RRF). Indeed liabilities have increasingly moved from bank balance sheets to the Fed, freeing lending capacity. One must recall reserves are not fungible outside of the banking system (but can act as collateral for margin). With flow decreasing, the opportunity for small relative volume bids spread over a large quantity of transactions (most instances per unit time) decreased with market prices in many asset markets. Is more downside coming?

 
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