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Old 01-24-2020, 10:21 AM   #261
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<analysis, charts, rants>
...
You’re staring at a massive asset price distortion with indices and individual stocks dancing at an 80’s RSI party, while yields and growth not confirming any of this.
I maintain the Fed has set in motion perhaps the most dangerous and reckless asset bubble since the year 2000. Nobody will believe it until something bad happens.

Will Powell be confronted with any of this next week?
Will he get challenged on the obvious effects his not QE lie has on asset prices?
Will he get challenged on the claim that the Fed does not target asset prices when it in effect does?
...
https://northmantrader.com/2020/01/24/80s-party/
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Old 01-27-2020, 09:24 AM   #262
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Opinion piece by Jim Bianco:
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...
Unfortunately, the Fed made a critical design error in its daily interventions. They are offering to supply repo to the dealers at prevailing market rates. In other words, they are giving the dealers every incentive to take repo from the Fed as opposed to the market. In essence, the Fed has become the lender of first resort when it should be the lender of last resort and offer repo at a penalty rate. The Fed should be willing to help a dealer in need, but it should come at a price.

So, after four months of these Fed repo operations, new problems are emerging. More specifically, the Fed might be going too far and oversupplying this market. The effective federal funds rate is signaling there are enough reserves in the banking system. This month it traded at 1.54%, breaking below the interest on excess reserves (IOER) floor of 1.55% for the first time in 14 months. This is happening as the Fed announces it will continue to plow ahead with Treasury bill purchases and supplying hundreds of billions of dollars of repo supply until April, if not later.

What should the Fed do? It has already telegraphed it will raise the IOER rate by five basis points to 1.60% at the Federal Open Market Committee meeting next week. Presumably, it will also raise the repo offered rate by five basis points to 1.60%. Policy makers should raise the repo rate even higher. Stand ready to offer liquidity, but at a penalty rate.

This won’t fix the problems in the repo market; only rule changes can do that. But at least this will allow the Fed to identify how much supply is needed to get the market back in balance rather than risking a loss of control of the federal funds rate altogether.
...
https://www.bloomberg.com/opinion/ar...-no-fix-at-all
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Old 01-28-2020, 08:04 AM   #263
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January 16, 2020

WASHINGTON — The U.S. Department of the Treasury today announced it plans to issue a 20-year nominal coupon bond in the first half of calendar year 2020.

Over the past several years, Treasury has explored a range of potential new debt products, including 20-year, 50-year, and 100-year bonds, as well as floating-rate notes linked to the Secured Overnight Financing Rate—all with the goal of expanding borrowing capacity to finance the federal government at the least cost over time.
...
https://home.treasury.gov/news/press-releases/sm878

I don't pretend to understand the full significance of this event. But they wouldn't be doing it if they weren't feeling pressure to expand borrowing.
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Old 01-28-2020, 03:47 PM   #264
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Perhaps its time to print that $trillion dollar note ............

you can get RSI if you spend too much time pressing Ctrl+Print
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Old 02-05-2020, 08:13 AM   #265
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... the Fed also conducted its overnight repo which saw a whopping $64.45BN in liquidity injected...

... and which together with the massively oversubscribed $30BN term repo discussed below, means the Fed has injected $94.45BN in liquidity for today's market needs.

After several relatively uneventful reverse-repos to close off the month of January, which saw a gradual decline in submission, February has started off with a bang.

Even ahead of the results of today's reverse repo, some traders were already closely watching to see how it would play out for one main reason: as we reported on Jan 14, this was the first "tapered" reverse repo, whose aggregate operation limit was shrunk modestly from $35BN to $30BN.
...
https://www.zerohedge.com/markets/li...rt-repo-crisis
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Old 02-06-2020, 10:26 AM   #266
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Two days after dealers unexpectedly flooded the first reduced term-repo (from $35BN previously to $30BN) offered by the Fed, the liquidity shortage in the repo market ... persists, and today the Fed announced that in its latest 2-week term repo (maturing Feb 20), it was $57.25BN in submissions ($35.75BN in TSYs, $21.5BN in MBS) for a maximum $30BN in available reserves.

This means that for the second time in three days, the term repo operation saw a massive oversubscription ...
https://www.zerohedge.com/markets/an...liquidity-woes
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Old 02-12-2020, 09:43 AM   #267
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Fed Injects $68 Billion In Liquidity As Third Oversubscribed Term-Repo Confirms Liquidity Shortage Accelerates

https://www.zerohedge.com/markets/th...age-persisting
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