Fast Facts

The Fed’s Stupid Parlor Trick Silly Putty Reverse Repo Game

Fed Tri Party Reverse Repo Program- Click to enlarge

I regularly cover developments in the Fed’s ridiculous Reverse Repo (RRP) program in the MacroLiquidity Pro Trader Report. That short section of the report is normally just a mundane account of what went on in that useless program over the course of the week. I say that the program is useless because the Fed will almost certainly never use it for…

Wall Street Examiner Exclusives

We Have Come To Bury Debt, Not To Praise It

The Fed’s balance sheet went through the normal mid month fluctuations last week as MBS are paid down early in the month and then are replenished at mid month. There has been essentially no change in the total size of the balance sheet since QE officially ended a year ago. And there will be no material change going forward until the Fed either decides to start shedding assets (not gonna do it) or until it restarts QE (somewhat more probable than shrinking the balance sheet).

When Central Banker Economic Delusions Become Everyone Else’s Living Nightmare

The Composite Liquidity Indicator has been inching sideways after hitting a new high during the August 26 week. More importantly, the slope of the line has been nearly flat since January. In this game, if liquidity isn’t growing, that’s tight. Governments are always borrowing more, so if the system isn’t providing new cash to absorb that debt, the cash to pay for the new debt needs to come from somewhere else. That spells liquidation.

Accounting For The Fed’s Liabilities As Fed Funds Market Disappears

Fed Liabilities Week Ended September 16

Where else can we review the weekly balance sheet changes of a major corporation, bank, or other financial institution weekly? The Fed provides the means for us to look at its balance sheet every week and actually follow the flows of funds as they move from the Fed to the Federal Government to the banks and vice versa.