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On Today's Program- Mahler's Funeral March 3/13/20

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France basically shut down. All Bars, Restaurants etc. People should only go out for buying food. Everyone who has the possibility should work from home. 

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The Orange Man will lead you brave americans into the abyss. May the Lord help you.

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Read my lips:

They will shut down Wall Street within the next two weeks.

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Wow. They gonna spy on citizens. Good. Like in China. We need drastic measures.

JERUSALEM - Israel will shut malls, hotels and restaurants in a partial shutdown of its economy starting on Sunday and use anti-terrorism tracking technology to minimise the risk of coronavirus transmission, Prime Minister Benjamin Netanyahu said.

Subject to cabinet approval, anti-terrorism monitoring tools will be deployed to locate people who have been in contact with those carrying the virus, Netanyahu told a news conference in Jerusalem on Saturday.

"We will very soon begin using technology ... digital means that we have been using in order to fight terrorism," Netanyahu said. He added that he asked for Justice Ministry approval because those measures would infringe patients' privacy.
Read more at https://www.todayonline.com/world/israel-imposes-partial-economic-shutdown-counter-coronavirus-netanyahu
https://www.todayonline.com/world/israel-imposes-partial-economic-shutdown-counter-coronavirus-netanyahu

 

 

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Zero word on dead bodies, on Wall Street or Stamford or in The City. Which derivatives are naked with no collateral worthy of the name inside them.  Well no news is good news they say.  Even if the Fed and it's central bank friends can liquefy every one of them in theory,  there is no way to ID them all much less come up with some mechanism to do so. Not quickly anyway, like next week. Mums the word and the strategy I suppose but sometimes people just want their money, and they talk.

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Atilla is back

Xtrends is back, they earned, same as Slope of Hope - 650 point to the downside.

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5 hours ago, fxfox said:

To restart QE in earnest after a 20% downmove on a weekly closing basis would be outright idiotic, insane and plainly dumb. FED will not do it. Not now at least.

Trump will loose office, either thru the electorate or by assassination.

What do you mean "restart in earnest?" They restarted it in September. They have been doing $80 billion per month in outright purchases. Even without the repos the existing program is as big as QE 3, and if you include the repos, the biggest QE EVER. 

They announced Friday along with the $37 billion purchase (not $33 billion) that they would increase the monthly purchases from the current $80 billion.  They just don't know how much yet. But consider that the markets melted down WHILE the Fed was doing $80 billion a month in outright QE, and another $150 billion in repo loans over the past 2 weeks. 

More QE will not fix the problem that QE caused in the first place. 

 

Quote
Statement Regarding Treasury Reserve Management and Reinvestment Purchases
March 13, 2020

To address temporary disruptions in the market for Treasury securities, the Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York has updated the current monthly schedule of Treasury purchase operations.  

Today, the Desk will conduct purchases in each of five maturity sectors below at the times indicated, subject to reasonable prices.  

  • 20 to 30 year sector at 10:30 – 10:45 am and 2:15 to 2:45 pm for around $4 billion each
  • 7 to 20 year sector at 11:15 – 11:30 am  for around $5 billion
  • 4.5 to 7 year sector at 12:00 – 12:15 pm for around $8 billion
  • 2.25 to 4.5 year sector at 12:45 – 1:00 pm for around $8 billion
  • 0 to 2.25 year sector at 1:30 – 1:45 pm for around $8 billion

These purchases are intended to address highly unusual disruptions in the market for Treasury securities associated with the coronavirus outbreak.  These purchases are part of the $80 billion of planned monthly purchases, including both $60 billion of reserve management purchases and $20 billion of reinvestments of principal payments received from the Federal Reserve’s holdings of agency debt and agency mortgage-backed securities. In these purchases, the Desk will include securities that are cheapest to deliver into active Treasury futures contracts as eligible securities for purchase. The Desk intends to further bring forward remaining purchases for this monthly calendar and adjust terms of operations as needed to foster smooth Treasury market functioning and efficient and effective policy implementation.  A revised schedule will be posted.

 

With no prior announcement or clue, the Fed bought $37 billion in Treasury coupons from Primary Dealers on Friday. To pay for them it deposited $37 billion into dealer accounts at the Fed.

It was the largest single day POMO (Permanent Open Market Operation) purchase since the days of TARP and QE 1 in 2009.

It came without warning. I was so glued to the intraday live charts on Friday, I wasn’t even aware that the Fed had taken this emergency action until after the close.

We sure as hell saw the result. But this is only the beginning of this story.

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FED TO ANNOUNCE COMMERCIAL PAPER PURCHASES PROGRAM TOMORROW - BofA

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40 minutes ago, SiP said:

FED TO ANNOUNCE COMMERCIAL PAPER PURCHASES PROGRAM TOMORROW - BofA

I am not sure why money market funds breaking the buck would be considered a big deal anymore.  After all there were and probably still are $12TN in soverign bonds that essentially have. In a perverse way, and all things financial are now perverse, negative MM rates would be a positive. Well all rates being negative would be a positive now.  After all low rates are supposed to bring inflation and inflation is good. Or something.

I'm getting a headache and am going to lie down.

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1 hour ago, Jorma said:

I am not sure why money market funds breaking the buck would be considered a big deal anymore.  After all there were and probably still are $12TN in soverign bonds that essentially have. In a perverse way, and all things financial are now perverse, negative MM rates would be a positive. Well all rates being negative would be a positive now.  After all low rates are supposed to bring inflation and inflation is good. Or something.

I'm getting a headache and am going to lie down.

 

Quarantine. 

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Buying commercial paper will have no impact whatsoever.  The Fed has no clue what the problem is because it would have to look in the mirror. 

COVID-19 gives it the perfect excuse not to. 

 

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Portugal said that the peak of infection would happen in mid may 2020. They hope for vaccine in fall 2020.

Two months of remote work, closure of pubs, restaurants will kill the economy. Its a depression.

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Doc, 

thanks a lot for your further explanation regarding the impact of those Repo operations and that other FED stuff. Very much appreciated. Thank you. 🙂 

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