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IDS World Markets Fri 7th August 09


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Hype and Hysteria- Professional Edition Fed Report

by Lee Adler, Thursday, August 6, 2009, in Money and The Fed, Professional Edition | Permalink |Comments (0) Edit The Fed bought another load of Treasuries today, as previously scheduled, and consistent with their behavior in past weeks. Did they help the PDs absorb this week’s mountain of supply? Of course. That’s what the Fed does. It’s part of their mandate. They’ve been doing it since time immemorial, way, way before quantitative easing ever started. They even discuss it in some detail on the New York Fed website, including the fact of their daily morning meetings with the Primary Dealers to see what the dealers needs are in carrying their securities inventories. They actually publicize this. If you want to be conspiratorial, do you publish the details of how you do it on your website? Click here to download complete report in pdf format (Professional Edition Subscribers). Try the Professional Edition risk free for thirty days. If, within that time, you don’t find the information useful, I will give you a full refund. It’s that simple. Click here for more information.

Posted

from other forum

think the bigger issue is the Fed's buying of GSE debt and securities.

 

Even after all the recent long term Treasury buying, the Fed still has ~ $100 billion less in Treasuries on its balance sheet today than it did at the start of the mortgage crisis two years ago. At the end of July 2009, the Fed had ~ $683 billion in Treasuries vs. ~ $352 billion in July of 2008 vs. ~$786 billion in July of 2007. It's important to note that the mix of Treasuries on the Fed's balance sheet has changed from almost all short term bills, to about 2/3rds bills (short term) & 1/3rd notes (longer term). Most believe the Fed moved to longer durations to keep long rates down. I hold a different view. I believe the Fed moved to longer term notes to prevent yields on short term bills from going negative as they did during the peak of the financial panic/meltdown. I also don't believe the Treasury is having any difficulty selling debt. Demand for Treasuries, especially Treasury Bills is very high. I believe the Fed is simply replacing the Treasuries it sold during the peak of the crisis.

 

If you want to see the face of monetization you need to look at the Fed's GSE debt and securities purchases. Since the end of September 2008, the Fed has exchanged > $650 billion in freshly printed federal reserve notes (cash) for GSE mortgage paper. Believe me when I tell you that at this point, the Fed IS the mortgage market. And mortgage paper is the conduit that the Fed is using to flood the banking system with money. And remember, the Fed has announced their intention to purchase $1.25 TRILLION in GSE paper. Talk about a helicopter drop!

 

BTW, the Fed's purchases of GSE paper are very likely illegal. Per the Fed's CONgressional charter, the Fed is only allowed to purchase investments backed explicitly by the U.S. Gov't. GSE paper is issued with an explicit warning that it is NOT backed by the U.S. Gov't.

 

We are witnessing the biggest bailout and wealth giveaway in history.

Posted

w?s=^AORD

 

 

Down but not altogether bearish. All Ords finished -0.6% with mostly small rises and falls in the sectors. Miners topped the downers, -1.7%, Materials -1.5% and Telecomms -1.3%. At the other end, IT +0.4%, Healthcare +0.2% and Utilities flat.

 

Mostly down in Asia: China -1.7%, Honkers -1.6%, India -0.7% and Nikkers +0.2%.

 

 

Over to UK/Europe:

 

Footsie

 

image;size=239x110

 

 

DAX

 

image;size=239x110

 

 

CAC 40

 

image;size=239x110

Posted
Hey stoolies and FED balance sheet lovers, especially DOC. You thought that PDs buy UST. THINK AGAIN

 

Doc, is this included in your report. I mean, have you know it?

 

The Fed Buys Last Week's Treasury Notes

http://www.chrismartenson.com/blog/fed-buy...y-auction/23880

well, ZH has a post about it

http://www.zerohedge.com/article/feds-ust-...-scheme-exposed

 

Ah jeez. Here we go again.

 

http://www.capitalstool.com/forums/index.p...st&p=757231

Posted
from other forum

 

You MUST POST A LINK TO ANY THIRD PARTY STUFF

 

It's completely false that the Fed is limited to purchasing Treasuries only. They have purchased Agencies in the past. They can buy whatever they want to, LEGALLY.

 

STOP POSTING UNATTRIBUTED UNSOURCED HORSECRAP.

Posted

I really appreciate everyone's support who subscribes to the service, but it would really help you, Swordfish, if you would read it. Then you would not have to ask me a question like that.

 

That way you can learn to recognize the difference between fact and fiction when you surf the web looking for hysterical sensationalism.

Posted

OK. I'm leaving for vacation for a few days.

 

Don't burn the place down. ;)

 

Thanks for everyone's support!

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