Federal Reserve Balance Sheet Update: Week Of December 1: The Ponzi Must Go On

Now that the Fed is firmly number one in the world in terms of US Treasury holdings (actual marketable paper, not the mythical paper held by various insolvent trusts) with $926 billion in Treasury paper post today's POMO, providing Fed balance sheet updates seems like a moot point. After all, most people by now realize how this will end. And once Trichet starts monetizing debt too (not if but when, which will be followed by Japan, Switzerland, and China), the global Weimer endgame will come quickly. But for now, for the sake of tradition, here is the weekly update of the Fed's most recent balance sheet.

All numbers as of December 1:

  • Securities held outright: $2,088 billion, $1 billion more than the week prior.
    • Total Treasury holdings increased from $901 billion to $917 billion.
    • MBS holdings declined from $1.038 trillion to $1.023 trillion. As we expected, the prepay of mortgage paper at the Fed is accelerating. In other words, just based on the QE Lite mandate, the Fed could have bought $15 billion in USTs this week. It is in fact lagging, meaning that the next POMO schedule will likely be around $150 billion for December through January.
    • Agency holdings were flat at $148 billion.
  • Net borrowings: flat at $49 billion.
  • Float, liquidity swaps, Maiden Lane and other assets: $194 billion, flat W/W. FX liquidity swaps were at $60 million as that one bank continues to borrow the same amount for 3 months now. The value of Maiden Lane I was at $27.6 billion. Maiden Lane II was at $16.3 billion, Maiden Lane III at $23.4 billion while AIA Aurora was $26 billion. 
  • The monetary base was $1.979 trillion.
  • Reserve balances with banks: $1,008 billion, a decline of $17 billion from last week, and an incremental source of money for the Primary Dealers to chase risk.
  • Foreign holdings of USTs and MBS at a new all time high of $3.34 trillion, an increase of $15 billion W/W.
  • There was a plunge in Primary discount window borrowings which last weak peaked at $1 billion, the highest since may, plunging to just $40 million. Then again with the Bernanke put, who needs the discount window.

And this is how the Fed stacks up against the rest of the world in terms of Treasury holdings post today's POMO:

And some brownie points to the first reader to calculate the SOMA's DV01 and how many billions the Fed lost today on the move in rates alone.