tag:blogger.com,1999:blog-30643134.post3673603671332051256..comments2023-12-26T01:10:26.319-05:00Comments on Accrued Interest: Bernanke Shot FirstAccrued Interesthttp://www.blogger.com/profile/05096191765979971184noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-30643134.post-24899942051733223162007-10-11T16:39:00.000-05:002007-10-11T16:39:00.000-05:00Anon @12:20: I think their grasp on the situation ...Anon @12:20: I think their grasp on the situation is coming around to a more negative view. I think they might have been a bit too sanguine on housing.<BR/><BR/>Anon @1:57: I think the only reason why their cut 50bps was to shock us. It wasn't necessary for pure macroeconomic reasons to cut 50. Now, I'd say there is a strong argument for cutting around 100bps in total. But I don't think a sudden 50bps would have happened without the liquidity crunch of August/September.Accrued Interesthttps://www.blogger.com/profile/05096191765979971184noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-77421262603690784512007-10-11T14:18:00.000-05:002007-10-11T14:18:00.000-05:00great post as usual<B>great post as usual</B>Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30643134.post-23124731044280292152007-10-11T09:06:00.001-05:002007-10-11T09:06:00.001-05:00This comment has been removed by the author.flow5https://www.blogger.com/profile/10233035883019771736noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-1408701398993260022007-10-11T09:06:00.000-05:002007-10-11T09:06:00.000-05:00I don’t watch the volume of temporary open market ...I don’t watch the volume of temporary open market operations, only their stop-out rates. Maybe if I was a primary securities dealer or a day trader I would pay more attention. The stop-out rate has been moving up, since roughly the 4th. <BR/><BR/>The NY Open market Desk sets the one-day repo rate on Treasuries, that is, the one-day cost-of-carry on government bonds. This is the true policy instrument -- and it affects huge amounts of money (essentially, the one-day return on all government securities), while fed funds transactions daily, in comparison, are a trivial amount. That is, the FOMC targets the federal funds rate (nominally the rate banks charge each other on overnight loans of deposits at the Fed), indirectly.<BR/><BR/>Today is Thursday (the beginning of the reserve maintenance period) & the “trading desk" (because of the 30 day lagged reserve requirements on bank liabilities) uses the data from this reserve computation period, to supply or absorb required reserves balances (hence the large 14 day open market purchases).<BR/><BR/>The focus on repurchase agreements (TOMO) ignores many factors that have had profound effects (sometimes even short-term) on the depository institutions capacity to create new money & credit. Some of these are variables are (1) currency held by the non-bank public (the principle drain on reserves), (2) bank capital accounts, the (3) Treasury's General Fund Account (quarterly tax collections), (4) float, (5) adjustments for reserve ratios, (5) 4% deficiency or excess carryover, (6) smoothing the 2 week maintenance period average level of reserves, etc.flow5https://www.blogger.com/profile/10233035883019771736noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-22122150724060612672007-10-10T13:57:00.000-05:002007-10-10T13:57:00.000-05:00It is really impossible to read your post without ...It is really impossible to read your post without thinking that their really was no reason to lower by 50 bp.<BR/><BR/>Hmmmmmmm.<BR/><BR/>The stock market sure took off like a rocket afterwards...which might be another reason to believe the cut wasn't necessary.<BR/><BR/>Why? Simple. A 50 bp cut is a panic move in the face of panic conditions. Yet the stock market treats it like good news. Sheesh. It must not have been necessary.<BR/><BR/>Hmmmmmmm.<BR/><BR/>I hope it was necessary. I really do.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30643134.post-46485454737739765742007-10-10T12:20:00.000-05:002007-10-10T12:20:00.000-05:00"I think their view on housing continues to get wo...<B> "I think their view on housing continues to get worse." </B><BR/><BR/>Does this mean<BR/><BR/>a) Housing in their view is getting worse.<BR/><BR/>or<BR/><BR/>b) Their view on housing (ie their grasp of the situation) is getting worse.<BR/><BR/>?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30643134.post-22832190822939895502007-10-10T11:59:00.000-05:002007-10-10T11:59:00.000-05:00@flow5 So whats your thinking about this $46bln m...<A HREF="http://moneycentralbanking.blogspot.com/" REL="nofollow">@flow5</A> So whats your thinking about this <A HREF="http://www.gmtfo.com/reporeader/OMOps.aspx" REL="nofollow">$46bln </A> maturing tomorrow in the Fed's TOMO?<BR/><BR/>thanks in advanceAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-30643134.post-62120881268912185292007-10-10T11:45:00.000-05:002007-10-10T11:45:00.000-05:00fed funds/stop-out target10/10 4.7510/9 4....fed funds/stop-out target<BR/><BR/>10/10 4.75<BR/>10/9 4.91 4.72<BR/>10/5 4.77<BR/>10/4 4.74 4.63<BR/>10/3 4.68 4.76<BR/>10/2 4.78<BR/>10/1 4.92<BR/>9/28 4.58<BR/>9/27 4.93 4.25<BR/>9/26 4.88 *<BR/>9/25 4.82 4.63<BR/>9/24 4.74 4.63<BR/>9/21 4.76 4.62<BR/>9/20 4.77 4.45<BR/>9/19 4.74 4.67<BR/>9/18 4.92 4.97 4.75<BR/>9/17 5.33 5.18 5.25<BR/>9/14 5.25 5.04<BR/>9/14 5.25 5.04<BR/>9/13 5.09 4.70<BR/>9/12 5.18 4.87 *<BR/>9/11 5.06 4.90<BR/>9/10 5.07 4.95<BR/>9/07 4.86 5.05<BR/>9/06 4.98 5.05<BR/>9/05 5.18 5.22<BR/>9/04 5.22 5.20<BR/>9/03 holiday<BR/>8/31 4.96 5.10<BR/>8/30 5.00 4.85<BR/>8/29 5.00 5.35 *<BR/>8/28 5.30 <BR/>8/27 5.27 5.05<BR/>8/24 5.11<BR/>8/23 4.88 3.00<BR/>8/22 4.87<BR/>8/21 4.89<BR/>8/20 5.03 4.33<BR/>8/17 4.91<BR/>8/16 4.97 4.80<BR/>8/15 4.71*<BR/>8/14 4.54<BR/>8/13 4.81 5.11<BR/>8/10 4.68<BR/>8/09 5.41 5.15<BR/>8/08 5.27 5.18<BR/>8/07 5.26 5.17<BR/>8/06 5.26 5.17<BR/>8/03 5.24 5.17<BR/>8/02 5.24 5.14<BR/>8/01..5.30 5.13 *<BR/>7/31 5.28 5.14<BR/>7/30 5.29 5.17<BR/>7/27 5.25 5.19<BR/>7/26 5.28 5.16<BR/>7/25 5.32 5.14<BR/>7/24 5.25 5.15<BR/>7/23 5.26 5.15<BR/>7/20 5.25 5.14<BR/>7/19 5.25 5.12<BR/><BR/>The repurchase agreement rate (repo), or "stop-out" (lowest bid accepted for Treasury securities). This is the "true policy instrument". <BR/><BR/>The federal funds rate was below the target rate on 22 days before the Sept. 18th, 1/2 percentage point cut. Oct. 31st looks like a no-go.flow5https://www.blogger.com/profile/10233035883019771736noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-32146381219534849152007-10-10T08:56:00.000-05:002007-10-10T08:56:00.000-05:00It's all smoke and mirrors until he removes all of...It's all smoke and mirrors until he removes all of the 23A Tier Capital exemptions.Anonymousnoreply@blogger.com