Federal Reserve

The degree of intermediation by the Federal Reserve in the issuance of US Treasuries hit a record in Q2, accounting for just under 50% of all net UST issuance absorption. This is a startling number, as the Fed's $164 billion in Q2 Treasury purchasesdwarfs the combined foreign/household UST purchases of $101 billion and $29 billion, respectively, over the same time period. In fact, the Fed was a greater factor in UST demand than all three traditional players combined: Foreigners, Households and Primary Dealers, which amounted to a $158 billion in net Q2 purchases.

The Fed now has $15 billion in purchasing power left under the Treasury component of QE. Of the $1,250 billion in MBS projected to be bought by the end of the year, the Fed was already purchased $840 billion, leaving $410 billion in budgeted purchases over the next three and a half months: about $125 billion per month.

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.

Rep. Alan Grayson announces there will be a hearing in late September on the bill to audit the Federal Reserve.

"[The Fed] is bigger than the Congress, [it] has more power than the Congress. The Fed Chairman probably is more powerful than our president, and yet we refuse to look at it. The time has come for us to look at the Fed" - Ron Paul

• Securities held outright: $1,501 billion
  (an increase of $128.7 billion MoM, resulting from $32.6 billion in new
  Treasury purchases, $82.4 billion increase in MBS and $13.7 billion in Agency Debt), or $10.7 billion increase sequentially
• Net borrowings: $320.3 billion, a decline of $5 billion compared to two weeks prior
• Float, liquidity swaps, Maiden Lane and other assets: $248.9 billion, an $2 billion decrease on ongoing $1 billion reduction in CPFF (an issue discussed repeatedly by Zero Hedge) while liquidity swaps, after bottoming out recently and gradually reversing, have again declined by $2 billion sequentially.

Total Federal Reserve balance sheet assets for the week of September 2 of $2,070 billion

Judge Loretta Preska, who earlier this week ruled against the Fed in its long running FOIA lawsuit with Bloomberg, and demanded it disclose firms benefiting from and loan amounts handed out under various emergency order, has filed a stay on the original order and has awarded the Fed with a September 30 deadline to appeal the order.

Total Federal Reserve balance sheet assets for the week of August 26 of $2,049 billion

August 24, 2009 will undoubtedly go down as a day of celebration at Zero Hedge as the thus-far bullet proof Federal Reserve was ordered to produce documents improperly withheld from Bloomberg reporters Mark Pittman and Craig Torres.

Score another one for the little guys.

A one hour program in which Ron Paul provides the basics of the Federal Reserve and why it is high time transparency was introduced to this most critical of institutions. Must watch.

Last week's $300 million decline in Foreign Holdings was promptly reversed and this week saw an increase of $7.2 billion. Yet, like last week, the comparison between domestic and foreign weekly securities purchases is trivial: $7 billion versus $86 billion: the US is promptly becoming its own largest debtor... by a factor more than 10x.

Foreign holdings of US Securities decreased for the first time in 5 months by $299 million sequentially (weekly) to $2,809.9 billion from $2,810.2 billion in the prior month. Keep in mind in the same time period the Fed purchased over $16.6 billion of Treasuries, indicating that in the last week the Fed was the only purchaser of Treasuries. In a normal environment this would be a very troubling development.