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And yet another record day
AND WE HAVE ANOTHER R REPO RECORD TODAY of
SEVEN HUNDRED AND FIFTY FIVE BILLION Didn't I just say they were going to really start ratcheting this thing up BIG TIME...saying just 2 weeks ago 500B..700B...a 1000B a day.... Nobody who isn't fking delusional, a Chump or is just a plain retard can put lipstick on this pig of an economic state of affairs... Everything you fkin see on TV and or read is just fkin BS...out to lunch fkin shyte... We are seriously fked... This economy is like a door flappin around with loose hinges in a tornado...about to fly off at any second.. Hey Powell we ain't in Kansas anymore... OHH HAPPY DAYS ARE HERE AGAIN>>>ain't things just grand! |
And we have count em ELEVEN GOP Senators ready to sign off on a $1,000,000,000,000.00 Infrastructue Bill.
Ain't that a pip...I guess those guyz think we is a RICH nation... Maybe with the passage of that we will start to see 2 Trillion R Repo days...???? |
i’ll admit i read the other thread and now this and i have no idea what you are talking about. i just dont understand it
so, could you do an idiot like me a favor and explain what it will look like when the dominoes start falling? how will all this stuff your talking about manifest itself in real life? can you give examples so i can keep an eye out for that rather than having to go back to college to learn economics? |
The question, Tabs, is what do you do with this information? It's like getting a CT scan or MRI with a grave diagnosis. OK, now what do you do with this? How do we get out of this predicament? What treatment do you start, and when?
Granted you (and we) are not a Ben Bernanke or Jerome Powell or Janet Yellin. But what do we--as individuals--do to mitigate the eventual outcome? When is it going to happen? How do we protectively position ourselves? What do you do with this information other than running around, yelling about how much trouble we're all in? Unless you've got a plan--specifically--of what to do and when, your diagnosis (even if spot-on correct) is effectively worthless. |
Yet DXY trades 91.83
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RRP rate raised from zero to 0.0005%, naturally this attracted more overnight cash from money market funds and banks. Reflects money market funds having more cash inflow than they can find high quality short-duration investments to buy, and banks, particularly the largest banks, having more cash deposits than they can find loans to make. The financial system is swimming in cash and short rates are near zero, so these institutions park cash at the Fed overnight.
I am having trouble seeing why an excess of cash at large banks and money market funds is something to be very alarmed about. I get that it is a symptom of surplus cash in the financial system, which we already know about. But how does, say, JPM having $500BN of excess cash sitting in its Fed checking account threaten to bring down the economy? What is the direct mechanism for that? |
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Simply put there are tons of usd hiding in mattresses overseas..everybody has em.. If they all start coming our of hiding due to an adverse shift in perception and sentiment well welcome to united states of Zimbabwe. So we know the FED printed em...we know they were in mattresses..but now they seem to be surfacing and beginning to flood the usa. In march 2020 an about face or adverse shift in the safe haven status of the usd took place. As Druckenmiller says money did not flow into.Treasuries in a crisis but out of them. The Chinese decided to reduce their us Treasuey portfolio by 200b over a period of time. There is a shift away from holding usd..seeking alternatives..so the queztion is from what mattress are these 755b coming from? A tsunami of them will wipe the usd and usa right off the Problem right now is that there is no scaleable alternative to the usd that has cred. The world for the moment is stuck wid em. The FED is planning on introducing a crypto FED usd. It is all an effort from keeping the global economy from crashing.. The key word here is DESPERATION. Why would the FED throw caution to the wind when tjey knew that their action was totally detrimental to the health pf the system. They had to or else. |
Buy your cemetary plot...line up.a clergyman and a choir to sing your requiem.
The FED is taking EXCESS CASH OUT OF THE SYSTEM and putting it into a daily limbo..the bucket of cash is overflowing..and they have to do something with it. It is more than the sytem can adsorb. Yet they are continuing QEing 120B a month...to buy mortgage back securities and US TREASURIES> So in essence they are ADDING MORE CASH eg pouring more cash into an already over flowing bucket. They can not stop, if they do there may not be enough buyers of Treasuries to buy all of them. The FED is the Buyer of last resort. Then interest rates will rise uncontrollably to entice Buyers to buy a now risky bond. Debt service becomes unsustainable. The FED has to buy the undersold Treasury offerings in order to keep interest rates low and under control. I mention quite a while ago that the US Treasury market is saturated and they have run out of parties with cash to lend to the USA. So the FED is left to print and buy US debt bonds..in essence burning the candle at both ends. If the banks are left to their own devices..they will have to deploy the excess cash into short term treasuries which would drive them into the negative interest territory. There is no incentive to put money into a bank or into a money market if you have to pay for the privileged. The postulation is that money would then flow out of the banks and into the mattresses..where to keep the banks solvent cash is banned and a digital currency is introduced that forces you to use a bank..and it's negative interest rates. It really is an obverse nether world...some call it he11. |
Here is the list of institutions who used RRP in January, it’ll be much the same today.
https://www.financialresearch.gov/money-market-funds/us-mmfs-repos-with-the-federal-reserve/ Basically, anyone with a large business in US govt money market funds who has more cash deposits than it can invest in the sort of things that money market funds buy, and other major US banks who have more cash than their balance sheet has room for and that they have loans to make, uses the RRP sometimes. It is a place to park cash overnight, and now that it pays 0.05% interest (annualized) more cash is getting parked there. Normally, money market funds and banks will have other places to park money, like T-Bills. But the US govt isn’t issuing as many T-bills as the market desires, so the interest rate on T-Bills is zero or occasionally even slightly negative. That is a problem for money market funds, who are losing money - they pay 0.01% interest, are waiving their fees, and earning zero, not good. That is also a problem for banks, who operate under regulations requiring liabilities (a customer deposit is a liability) to be supported by assets (like loans) or capital, but right now have more deposits than they want. So, the Fed steps up to its role (one of its roles) as the central bank and takes that excess cash as, essentially, overnight deposits. As I said before, this is one symptom of too much cash sloshing around without enough productive uses for it. As symptoms go, it seems pretty benign to me. I have yet to hear a concise explanation of how Fidelity having $50 billion of overnight deposits at the Fed is going to kneecap the economy. There are other symtoms of too much cash that are not benign, this particular one gets more attention than it deserves, in my view. |
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The FED has as much as admitted that their monetary policy can not fix the economy when Powell said last winter that the govt should spend big. They would then support spending by printing. The govt has more tools to stimulate the economy. |
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If you do prudent things to set the ship right it destroys the ship because it is the imprudent behavior that keeps the ship afloat. It is a Catch 22 proposition. |
As the Stones would say..."You can't always get what you want" ...sorry, no sympathy for the devil !
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I think someone needs a vacation.
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Between the two, I enjoy reading insights from Jyl. Tabby...not so much. Clearly only one of them appears to know what they’re talking about. The other keeps howling at the moon.
Carry on. |
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JYL..represents the Main Stream conventional wisdom pov...boiler plate. I represent the OBVERSE pov which is virtually unique. I see things spatially, where i continually construct and deconstruct equations. That is why i may seem redundant. That is how you learn how systems function by heart. The Global economy is wounded..it is still operational but is not functioning properly. The question is can it ever be made right again? It is not a forgone conclusion either way? There is a quality of underlying desperation that is causing people to.become frantic because the system has lost the certainty of continuity. The contortions of the FED to maintain a systemic equilibrium have become ever more complex and extreme. Govt and society have become ever more erratic and chaotic under the stresses unraveling. There isn't even a clarity about causation because people are in denial and don't want to face reality. The paradox is that behavior is what propels them to take actions that takes them ever closer to the edge. |
I can’t recall if I posted this link before.
https://fedguy.com/on-rrp-take-up-will-go-much-higher/#more-1551 Seems reasonable to expect RRP to go higher, until short rates move up, loan demand increases, etc. |
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I'm not asking how you right the ship or keep it afloat. I'm asking you to check out the lifeboat. Figure out how to lower it. Make sure its got rations and life preservers and whatnot. What are you doing now for when the ship finally goes under? |
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Some place nice and quiet to hunker down.. You have to play the game like it will never end..but when it does end those assets will be gone..it is the cost of doing business..then those hedge assets will come into play. The game aint about gettin ahead..or even preserving..it is about survival..eating, having shelter and safety. |
Our own Euell Gibbons. Ever eat a pine cone?
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I think about what my grandparents did during the Dep and ww2..victory gardens. Money was tight..so you had to make do. Women used to make cloths for the family...
Hair cuts were a bowl on the head to keep it even. Tech will regress.. Supply chains will breakdown like never before we just had a taste. Medicine..probably will become unavailable. Civil authority????? Gud luck...variable locally Water power gas etc..who knows.. variable Banks..gone..maybe open as a zombie. It will be unlike anything before..except ancient history..and it is the undermining of the usd that did it..that ripped the guts out of the system. Leaving you no where to turn. You folks did not want to recognize that you were broke in 08..and had to.retrench your lifestyles..to say the 30s..and to preserve your lifestyles they did what they did.. |
Now the us govt is insolvent and the usd is toast..since 08 it has been a scorched earth policy .
There is nothing left to rebuild upon..now it is a start from scratch proposition..that means real hard times for everybody including billionaires because the usd that their fortune is based upon is toast. It is like confederate money. And all the structures that are built based upon the usd are toast as well. My house is worth 1m usd..and that usd is worth zero. Or 20oz of gold at 50k an oz...but who has 20oz of Gold to buy it? Remember banks are all but gone..it might take you a year to earn an oz of Gold. So maybe you.will take an oz or 2 of gold for yer house if you need to. Social wefare and entitlements..blown.away with the wind.. Pensions...zip..gone broke |
should be "Tabs and the Howlers"
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Tabs has been calling for hyper inflation and the collapse of the fiat for his entire adult life.
He is mentally ill. Broken clock is right twice a day. I bet when there's finally a market correction, he will say "Told ya so!" Actually, he's simply been wrong for 8 years straight. Blind squirrel eventually finds an acorn. Standard Wikipedia trained gold bug who probably went bankrupt by shorting a bull market. These guys have correctly predicted the last 23 out of 8 recessions. Generally, these people have already destroyed their finances, career, and family life with their pathological paranoia. It is a form of mental illness, and I never feel ill will towards these people. https://i1.sndcdn.com/artworks-00059...7-t500x500.jpg |
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The American consumer is a spent force since 08...lessor paying or no job, no saving and credit to the eyeballs...no ability to consume means moribund DEMAND...and an anemic Global economy. Where govt and CB's have to spend and print to keep the Global economy afloat. That is FACT..REALITY ... In sept 2012 when sp 500 was 1450 I told ya SP 2250 with the length of time being the caveat for it going higher...as the FED with QE infinity guaranteeing the over and under on Equities...and since then up up and away....several short and sweet corrections since..mostly when the FED spooked Equities.. As long as the FED maintains street cred all will be well with Equities... That is FACT..REALITY. Gold Bug not me..The only Gold I have is in my watch, teeth, and the few flakes I got from panning for it. Shorting the mkt ..never have.. Mental Illness...nope I have been tested. |
Deflation? You've been wrong for decades.
Last deflation year was 1954. https://www.macrotrends.net/2497/historical-inflation-rate-by-year Please repost the 2012 post where you said to load up on SPY |
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