02/04/ · QE During the “Everything Mania”: Fed’s Assets at $ Trillion, up $ Trillion in 13 months. From blogger.com The Fed has shut down or put on ice nearly the entire alphabet soup of bailout programs designed to prop up the markets during their tantrum a year ago, including the Special Purpose Vehicles (SPVs) that bought corporate bonds, corporate bond ETFs, commercial mortgage SOARING COSTS Gazprom’s sales fell 18% to trillion roubles last year from trillion in Financial costs soared to trillion roubles from billion in , including a forex loss Holdings of U.S. equities by foreign private investors reached a record high of $ trillion in July, more than double the amount in , according to the most recent data compiled by the U.S
UPDATE 2-Gazprom reports 89% profit fall in , sees recovery this year | Reuters
The Fed has shut down or put on ice nearly the entire alphabet soup of bailout programs designed to prop up the markets during their tantrum a year ago, including the Special Purpose Vehicles SPVs that bought corporate bonds, corporate bond ETFs, forex 7.7 trillion, commercial mortgage-backed securities, forex 7.7 trillion, asset-backed securities, municipal bonds, etc.
Its repos faded into nothing last summer. And foreign central bank dollar swaps have nearly zeroed out. What the Fed is still buying are large amounts of Treasury securities and residential MBS, though no one can figure out why the Fed is still buying them, given the crazy Everything Mania in the markets.
One of the purposes of QE is to force down long-term interest rates and long-term mortgage rates. But long-term Treasury yields started rising last summer. The year Treasury has more than tripled since then and closed today at 1.
Mortgage rates started rising in forex 7.7 trillion January. Bond prices fall as yields rise, and the crybabies on Wall Street want the Fed to do something about those rising long-term yields and the bloodbath they have created in the prices of long-term Treasury securities and high-grade corporate bonds.
Holders of mortgage-backed securities receive pass-through principal payments as the underlying mortgages are paid down or are paid off. But trades in the TBA market take months to settle, and timing differences create the zig-zags.
The pace of the increase of the balance has steepened a little this year as pass-through principal payments slowed down due to the slowdown in mortgage refis caused by rising mortgage rates. It was going to be a huge program, according to media hoopla. This program is now shut down, and the Fed has ceased buying CMBS as of last week. Principal payments that the Fed receives will reduce the balance going forward.
The Fed continues to offer repos, but after it had raised the bid rate last June, making its repos unattractive, there have been no takers, forex 7.7 trillion. The remaining repos matured and were unwound last summer:.
The Fed offered dollars to 14 other central banks in exchange for their currency. The Fed created these Special Purpose Vehicles SPVs as legal entities that can buy assets that the Fed is not allowed to buy otherwise, such as corporate bonds, forex 7.7 trillion, junk bonds, forex 7.7 trillion, bond ETFs including junk bond ETFs, auto-loan backed securities, municipal bonds, corporate paper, etc.
The Fed lent to the SPVs, and the Treasury Department provided equity funding that would take the first loss. These SPVs are now on ice and have expired with exception of the PPP liquidity facility redwhich the Fed extended for another three months through June.
It buys PPP loans forex 7.7 trillion banks and is the only SPV that is growing. All others are either frozen or declining:. Enjoy reading WOLF STREET and want to support it? Using ad blockers — I totally get why — but want to support the site? You can donate. I appreciate it immensely.
Click on the beer and iced-tea mug to find out how:, forex 7.7 trillion. Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here. So that means they can start Qualitative Tightening pretty soon. It will be interesting to see what they choose to cut back on first. As Wolf said, forex 7.7 trillion, it is hard to understand why they are buying them in the first place. The FED is putting people out onto the streets, literally.
The homelessness epidemic lies directly on their doorstep. Turning shelter into a speculative forex 7.7 trillion is despicable, and should be criminal. The US Treasury pays the interest to all holders of Treasury securities, including the Fed. The Fed then remits the largest portion of that interest back to the US Treasury. Is that the ultimate negative interest rate? To not only borrow from yourself but to pay interest to yourself and end up with even more money in the end.
The Fed-Treasury relationship is at the beating heart of Federal Debt monetarization but DC goes out of its way to obfuscate the issue. The system is usually muddied through obscure lingo, opaque relationships, forex 7.7 trillion, half true descriptions, ignored implications, forex 7.7 trillion, etc.
I think a plain language post, laid out systematically, with some simple charts laying out the scale of the operation, would be well received. They could accomplish this by only buying treasuries though. The forex 7.7 trillion they are buying mbs and cmbs shows they are also out to keep the rich from losing anything.
Low interest rates are purely about trying to goose investment and disincentivize people from saving. My guess is the Fed plans to print money and grow its balance indefinitely, which is necessary to avoid a collapse of the financial system, forex 7.7 trillion. The balance sheet and its growth is now a permanent fixture, necessary to create inflation. Interest will continue to be paid by the Treasury, but this interest will be remitted back to Treasury round-tripped in order to maintain the illusion of fiscal prudence.
When the Treasury allocates newly printed money to people who are in debt, it IS a debt jubilee. There is no difference between forgiving debt and giving people free money to pay down debt. This fatally mistaken impression has allowed a lot of terminally toxic practices to grow beneath its canopy. Not willfully. But the Fed is NOT BIGGER THAN THE MARKET. The more they subsidize debt creation the more the amount of debt, then the more they have to purchase to keep rates below real levels, which begets more debt, round and round we go.
For all the governmental debt created, imagine the amount of off the books private debt created. Forex 7.7 trillion the 70s, the Fed was forced to FOLLOW the market higher….
and I think we are starting to see the Fed lose control and FIGHT the market. Then the Fed tightened, raising interest rates to forex 7.7 trillion. That was just a few of years ago. The Fed is only interested in increasing the value of the assets owned by Fed members and their friends. the fed has often said monetary policy can only do so much and have been pushing for fiscal spending for years.
here it comes. They are not the same. Team Blue is the party of austerity and balanced budgets. And the Federal spending makes up about a third of GDP…. so as they borrow and spend, they will applaud themselves with the improved GDP numbers, forex 7.7 trillion. Part of this GDP growth is real economic growth through increased productivity.
The other part is forex 7.7 trillion. So why is V so low and why has it been declining since the s? One reason is that the Federal Reserve Bank Fed has been pumping money into the economy, but to little avail because money is not changing hands. Another is that a lot of the money is concentrated among the richest Americans who are not spending most of their wealth, forex 7.7 trillion.
Look at the difference between mean and median family net worth. The larger the difference implies greater wealth inequality, which you can forex 7.7 trillion has been increasing since the s. This is why long-term inflation is expected to remain low.
The economy is awash in cash, but most of it is concentrated in the hands of a few who will not spend it. In contrast lower-and-middle income workers spend most of the money that they earn. Implicit Plausible theory which, if taken with demand going abroad through trade deficit, could contribute to understanding why no amount of money demand stimulus since has caused a, to be expected, massive general inflation.
The missing 20T? The GDP has to DOUBLE to catch up with current valuation of Mkts! By the real economy will have doubled. The current Fed Chairman is not qualified to do what he is doing by any stretch of the imagination. Yellen must know she is wrong. Her advisor was Tobin. I do not get it. I know, we are living in an alternative universe. That must be it. We have somehow failed to teach a least a couple of generations about economics. I think I will go hide under my bed forex 7.7 trillion. That is the solution.
Where are all of the grown ups? How can all of this be true, forex 7.7 trillion. What happened to the Ivy league? How could he not know about money? You mean like Krugman and Bernanke and Summers? Where is the Paul Volker of this era? This is certainly about economics, but there is something greater going on. The violations of the Constitution minting and taxing powers the Fed has assumed and violations of the THREE mandates of the Fed max employment, stable forex 7.7 trillion, moderate long term interest rates …, forex 7.7 trillion.
all these violations are ENJOYED by those who forex 7.7 trillion allegedly supposed to be the guardians.
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Holdings of U.S. equities by foreign private investors reached a record high of $ trillion in July, more than double the amount in , according to the most recent data compiled by the U.S QE During the “Everything Mania”: Fed’s Assets at $ Trillion, up $ Trillion in 13 months The Fed has shut down or put on ice nearly the entire alphabet soup of bailout programs designed to prop up the markets during their tantrum a year ago, including the Special Purpose Vehicles (SPVs) that bought corporate bonds, corporate bond ETFs, commercial mortgage-backed securities, Followers: K SOARING COSTS Gazprom’s sales fell 18% to trillion roubles last year from trillion in Financial costs soared to trillion roubles from billion in , including a forex loss
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