Rons correct- Federal Reserve gone crazy

[Johnnybags]

They are flooding more and more cash to insolvent banks, look at todays flood of cash, 3 announcements. Obviously they are in panic mode.

http://www.ny.frb.org/markets/omo/dmm/temp.cfm


Ridiculous, bail out Wall St. moguls thru forcing you to pay for it thru inflation. 100's and 100's of billions over the last few weeks, now the banks can roll it over? They can never pay it back.

[BW4Paul]

Hey Johnny,

I'm looking at your link, but I don't understand what I'm seeing (my background in Econ is, alas, limited to an Intro course in college). Could you please explain the significance of what is happening here?

Thanks :)

[UCFGavin]

Hey Johnny,

I'm looking at your link, but I don't understand what I'm seeing (my background in Econ is, alas, limited to an Intro course in college). Could you please explain the significance of what is happening here?

Thanks :)

i'm wanting the same thing :o

[Original_Intent]

If I am reading it right the Fed has pumped $21 billion dollars into the market in two shots of $5 billion each and one shot of $11 billion. I am not sure I am reading the data properly though.

That is so far THIS MORNING.

[Johnnybags]

Hey Johnny,

I'm looking at your link, but I don't understand what I'm seeing (my background in Econ is, alas, limited to an Intro course in college). Could you please explain the significance of what is happening here?

Thanks :)

21 billion today to hand out to Wall St. The banks are giving them collateral(dubious). They are simply stealing the buying power of your dollar to pump up food and energy prices etc. so Wall St. banks can try and save themselves. Dollar value down prices up. Its a stealth tax to make all of us pay for Wall St/hedge fund implosions. They are painting the DOW today massively, in an attempt to celebrate inflation, like the profits mean anything if the dollars are virtually worthless. Simple translation, John Q Public is being raped to prop up private markets and keep the rich oh well rich.

[noxagol]

Here comes the crash.

[microtron]

This article should help explain the numbers a bit:

http://mises.org/story/2676

[MsDoodahs]

It's the same old story.

[rodent]

21 billion today to hand out to Wall St. The banks are giving them collateral(dubious). They are simply stealing the buying power of your dollar to pump up food and energy prices etc. so Wall St. banks can try and save themselves. Dollar value down prices up. Its a stealth tax to make all of us pay for Wall St/hedge fund implosions. They are painting the DOW today massively, in an attempt to celebrate inflation, like the profits mean anything if the dollars are virtually worthless. Simple translation, John Q Public is being raped to prop up private markets and keep the rich oh well rich.

Here's the way it really works:

Say a hedge fund is doing poorly because of exposure to sub-prime, but it has large positions in some products. When clients call in to pull their money out, a hedge fund has to forcefully liquidate positions. This means that regardless of their forecasts and quantitative methods, they're forced to take actions against their interests and they have to dump shares. If everyone does this, then there is a liquidity crisis and markets don't function "cleanly".

A bank, on the other hand, doesn't have to do this. A bank with exposure to the markets can get a loan from the Federal Reserve in the short-term to avoid having to immediately hit the market. So what's likely happening is that the wealthy investors and customers are pulling out, but the bank is passing them notes from the federal reserve. The bank then has to liquidate its positions over time and collect those proceeds and send them back to the federal reserve. This will dampen overall market volatility and ensure sustained liquidity in the markets. (And it is an effective way for the wealthy to stem their losses.)

So if the banks pay back the "loan" to the federal reserve, the net position on cash flow in the global economy is effectively the same. It isn't true inflation. If, on the other hand, that extra liquidity makes its way into general circulation or the market, then we do experience inflation.

[AFTFNJ]

To the avg joe the Fed is just doing its job....after all it is the best thing since slice bread.

[micahnelson]

To the avg joe the Fed is just doing its job....after all it is the best thing since slice bread.

When that phrase came out, sliced bread was 15 cents.

[BW4Paul]

21 billion today to hand out to Wall St. The banks are giving them collateral(dubious). They are simply stealing the buying power of your dollar to pump up food and energy prices etc. so Wall St. banks can try and save themselves. Dollar value down prices up. Its a stealth tax to make all of us pay for Wall St/hedge fund implosions. They are painting the DOW today massively, in an attempt to celebrate inflation, like the profits mean anything if the dollars are virtually worthless. Simple translation, John Q Public is being raped to prop up private markets and keep the rich oh well rich.

Hey Johnny,
Ok, I get the basic idea from your post. But what, specifically, are these numbers saying? That is, how do I look at this page and understand:

1) What is meant by Treasury, Agency and Mortgage Backed?
2) What is meant by Submitted, Accepted, Stop-Out, Weighted Average, High and Low?
3) I guess the 2 infusions of 5 billion and one infusion of 11 billion must be coming from the Accepted column. But what's the deal with having such big Submissions and such comparatively small Acceptances? What does it mean and why is it happening?

Thanks :)

[Blowback]

To the avg joe the Fed is just doing its job....after all it is the best thing since slice bread.

It's not just the average Joe who is clueless about the Federeal Reserve. I've talked toa few people who you would think would have an in-depth knowledge of the federal reserve and their purpose and how they operate. I'm talking about some CFO's, MBA's, etc.

I asked them what they thought about the Federal Reserve.

The answer was they basically don't think about it. All they know is that the Fed sets interest rates and "who would do it otherwise?".

I told them the market should and true cost of capital should. They had a look on their face like... LOL WUT? Or maybe it was more just confused.

Anyways, the point I'm trying to make is that even people at the very top of business don't know shit about how it works and just take it for granted that the Fed has their best interests at heart, something that may or may not be true.

[micahnelson]

Anyways, the point I'm trying to make is that even people at the very top of business don't know shit about how it works and just take it for granted that the Fed has their best interests at heart, something that may or may not be true.

Its um, its not true... lol. They are chiefly concerned with either

a) Keeping the dollar solvent, allowing them to keep up their cushy deal and stave off economic collapse. They want to protect our economy- but not as a priority. Priority one is protecting their interests, and right now that means keeping the dollar afloat. We are in bed with the Saudi and China in order to do this, but its a small price to pay to preserve the dollar. (But it can't last forever)

b) They are waiting to sink the dollar at the appropriate time and then transition us all over to a world currency issued by the world bank and the IMF as the distributor. It would eliminate the risk from "sinking" currencies0- but allow them to devalue our currency without any recourse.

[hopeforamerica]

To the avg joe the Fed is just doing its job....after all it is the best thing since slice bread.


That's the shameful truth. Some people are going to have to experience the pain of a crash before they get it. Still the crash will be spun and it won't look like the Feds fault. My brother is guilty of this. Ugh...

[Santana28]

I asked them what they thought about the Federal Reserve.

The answer was they basically don't think about it. All they know is that the Fed sets interest rates and "who would do it otherwise?".


Thats the American educational system for you. As my teacher once told me - Its not about knowing the answers, its about knowing WHERE to find the answers.

We have an entire culture based on people seeking out supposed "experts" to provide the "answers" for the difficult questions. No one bothers to investigate or think for themselves. If someone feels they can trust a particular source of information, then they will believe whatever that source of information tells them is the truth.

GRRRRRR.......

[Dartan]

To the avg joe the Fed is just doing its job....after all it is the best thing since slice bread.

The Fed is older than sliced bread.

[Johnnybags]

Hey Johnny,
Ok, I get the basic idea from your post. But what, specifically, are these numbers saying? That is, how do I look at this page and understand:

1) What is meant by Treasury, Agency and Mortgage Backed?
2) What is meant by Submitted, Accepted, Stop-Out, Weighted Average, High and Low?
3) I guess the 2 infusions of 5 billion and one infusion of 11 billion must be coming from the Accepted column. But what's the deal with having such big Submissions and such comparatively small Acceptances? What does it mean and why is it happening?

Thanks :)

1. Collateral type for cash taken in
2. Amount of cash offered to the members, accepted and the rates
3. shows the demand today and now it means new money is on the market driving your value down and higher prices

They are letting them rollover loans now because the banks do not have the cash to pay it back yet! Its why oil is 80.00, wheat and commodites are soaring. In simple terms its inflation to your pocket to pay the bills for the banks who do not have the cash. New money. Based on nothing. It cost more to make a nickel now than a dollar bill. Nickels have value intrinsically, dollars are paper shit.

[SeanEdwards]

1. Collateral type for cash taken in
2. Amount of cash offered to the members, accepted and the rates
3. shows the demand today and now it means new money is on the market driving your value down and higher prices

They are letting them rollover loans now because the banks do not have the cash to pay it back yet! Its why oil is 80.00, wheat and commodites are soaring. In simple terms its inflation to your pocket to pay the bills for the banks who do not have the cash. New money. Based on nothing. It cost more to make a nickel now than a dollar bill. Nickels have value intrinsically, dollars are paper shit.

Dollars can be used as asswipe at least.

Can't do that with a nickel.

:D

[surf]

mortgage-backed securities are losing value, and theya re a relatively new form of acceptable "collateral."
For those that have never visited the Fed window, often times institutions will "pledge" collateral for short term loans to cover liquidity needs (lent at the "discount rate") or failed-deliveries of either cash or securities. These pledged securities are generally agency and Treasury notes that do not have much value on the repo market.
MBS were allowed as collateral to prevent the Y2K "crisis" and never were removed from this list. This has not only helped to raise the price of MBS but also to cause, what i consider, inappropriate risk assesments of these securities.
Jenga

[Proemio]

What does the Fed do?


"Give me control over a nations money, and I care not who makes its laws."
- Baron M.A. Rothschild

Founder of one of the mostly alien shareholder banks of the Federal Reseve Bank, the BIZ (Bank of International Settlements), and virtually every Central Bank in TheFreeWorld®.

Those shareholders always have only in the best interest of their clients in mind - whoever they may be. There is NO conflict of interest, no matter the appearance. Anyone saying so is a threat to 'national security'.

Ron Paul wants to get rid of it (theFed) if elected. Fortunately he can't win... or so they hope.

[The Good Doctor]

Yeah and unemployment goes up too! But doesn't count those workers that have dropped off unemployment still looking for work! Terrible!


21 billion today to hand out to Wall St. The banks are giving them collateral(dubious). They are simply stealing the buying power of your dollar to pump up food and energy prices etc. so Wall St. banks can try and save themselves. Dollar value down prices up. Its a stealth tax to make all of us pay for Wall St/hedge fund implosions. They are painting the DOW today massively, in an attempt to celebrate inflation, like the profits mean anything if the dollars are virtually worthless. Simple translation, John Q Public is being raped to prop up private markets and keep the rich oh well rich.

[The Good Doctor]

So, since the first day when they pumped more in, how much has been pumped in? From the Fed and Internationally? Because I read somewhere that there was a big pump of cash for the banks in Europe too.

[The Good Doctor]

I found this:

http://www.shortnews.com/start.cfm?id=64589

So, 137 Billion as of 8/30 + the 21 billion mentioned here. Wow!

[The Good Doctor]

I found this concerning international. But it is from the first few days.

http://blogs.wsj.com/economics/2007/08/10/central-banks-react-to-liquidity-crisiss/

[cjhowe]

It's not just the average Joe who is clueless about the Federeal Reserve. I've talked toa few people who you would think would have an in-depth knowledge of the federal reserve and their purpose and how they operate. I'm talking about some CFO's, MBA's, etc.

I asked them what they thought about the Federal Reserve.

The answer was they basically don't think about it. All they know is that the Fed sets interest rates and "who would do it otherwise?".

I told them the market should and true cost of capital should. They had a look on their face like... LOL WUT? Or maybe it was more just confused.

Anyways, the point I'm trying to make is that even people at the very top of business don't know shit about how it works and just take it for granted that the Fed has their best interests at heart, something that may or may not be true.

If a person holding an MBA gave you those answers, their school needs to have their credentials revoked.

[cjhowe]

They are flooding more and more cash to insolvent banks, look at todays flood of cash, 3 announcements. Obviously they are in panic mode.

http://www.ny.frb.org/markets/omo/dmm/temp.cfm


Ridiculous, bail out Wall St. moguls thru forcing you to pay for it thru inflation. 100's and 100's of billions over the last few weeks, now the banks can roll it over? They can never pay it back.

These are all overnight/over weekend loans. Nothing to see here. Find a new hat.

[propanes]

Not so fast says one author.

http://www.minyanville.com/articles/U.S.-hyperinflation-Weimar+Republic-M+Prime-printing+money/index/a/14099

[Corydoras]

Not so fast says one author.

http://www.minyanville.com/articles/U.S.-hyperinflation-Weimar+Republic-M+Prime-printing+money/index/a/14099

He writes: "But M2 and M3 represent credit transactions which are vastly different from monetary printing."

Um, I'm no economist, but isn't that exactly where the problem is coming from, credit transactions?