bimetalaupt
Senior Member
Joined: Oct 9, 2011 20:29:23 GMT -5
Posts: 2,325
|
Post by bimetalaupt on Mar 28, 2011 9:55:04 GMT -5
Statement Regarding Reverse Repurchase Agreements
March 23, 2011
As noted in the October 19, 2009, Statement Regarding Reverse Repurchase Agreements, the Federal Reserve Bank of New York has been working internally and with market participants on operational aspects of triparty reverse repurchase agreements to ensure that this tool will be ready if the Federal Open Market Committee decides it should be used. Beginning tomorrow, the New York Fed intends to conduct another series of small-scale, real-value reverse repurchase transactions using all eligible collateral types. The first set of operations will be conducted using only the expanded repo counterparties announced on January 31, 2011. The second set of operations will be open to all eligible reverse repo counterparties.
Like the earlier operational readiness exercises, this work is a matter of prudent advance planning by the Federal Reserve. The operations have been designed to have no material impact on the availability of reserves or on market rates. Specifically, the aggregate amount of outstanding transactions will be very small relative to the level of excess reserves, and the transactions will be conducted at current market rates. These operations do not represent a change in the stance of monetary policy, and no inference should be drawn about the timing of any change in the stance of monetary policy in the future.
The results of these operations will be posted on the public website of the Federal Reserve Bank of New York, together with the results for other temporary open market operations. The outstanding amounts of reverse repos are reported as a factor absorbing reserves in Table 1 in the Federal Reserve's H.4.1 statistical release, and as liability items in Tables 8 and 9 of that release.
Remember last time June 2010..Watching bonds now rather then stock but who knows.. note edit 10;20
|
|
bimetalaupt
Senior Member
Joined: Oct 9, 2011 20:29:23 GMT -5
Posts: 2,325
|
Post by bimetalaupt on Mar 28, 2011 14:09:49 GMT -5
Frank, If bonds fall like Bill Gross said then bank stocks could take it in the lose if they have to mark to market.. How long can the Federal Reserve carry loses on their books before they have to mark to market the losses... Sounds like the catch 22 the banks in Germany are in with the PIIGS'... huge loses on the books that have not been taken.. Should we sell bank stocks??  Just a question, Bruce |
|
kman
Initiate Member
Joined: Oct 8, 2011 20:43:42 GMT -5
Posts: 83
|
Post by kman on Mar 28, 2011 14:59:30 GMT -5
I took it as a sell...and did today. I can always buy back in.
|
|
|
|
Post by itstippy on Mar 28, 2011 18:25:27 GMT -5
"...the Federal Reserve Bank of New York has been working internally and with market participants ..."
Working with market participants. I wouldn't worry too much. We know who the "market participants" are and they won't be unduly damaged.
The Fed is hinting that it's starting to contemplate the possibility of maybe beginning to consider what hypothetical form a potential exit strategy might look like in the distant future.
|
|
Driftr
Senior Member
Joined: Mar 10, 2011 13:08:15 GMT -5
Posts: 3,478
|
Post by Driftr on Mar 29, 2011 8:44:12 GMT -5
Frank, If bonds fall like Bill Gross said then bank stocks could take it in the lose if they have to mark to market.. How long can the Federal Reserve carry loses on their books before they have to mark to market the losses... Sounds like the catch 22 the banks in Germany are in with the PIIGS'... huge loses on the books that have not been taken.. Should we sell bank stocks?? Just a question, Bruce I didn't think any banks had to mark anything to market since that jerkoff Congress-critter twisted the arm of FASB and had them 'relax' the MTM rules. Fed just has to clasify their securities as Held To Maturity and they shouldn't have to take any loss unless the priciple gets defaulted. At least that's the way I think it's set up today. |
|
dothedd
Senior Member
Joined: Dec 27, 2010 20:43:28 GMT -5
Posts: 2,683
|
Post by dothedd on Mar 29, 2011 16:40:11 GMT -5
"These banks/loans need to be marked down for two important reasons #1 The banks need to carry the loans at a real value based on the real value of the collateral against those loans. #2 people need to stay in their homes and with a principal write down they can." K4U FTI  |
|
bimetalaupt
Senior Member
Joined: Oct 9, 2011 20:29:23 GMT -5
Posts: 2,325
|
Post by bimetalaupt on Mar 30, 2011 23:44:04 GMT -5
These banks/loans need to be marked down for two important reasons #1 The banks need to carry the loans at a real value based on the real value of the collateral against those loans. #2 people need to stay in their homes and with a principal write down they can. Frank, Yes .. it would be better to reach a deal and keep the owner in the home...K4U also!!! From Duff.. on the unresulved banking Crisis.. Esp European banks like German and London With the talk about increasing dividends... The Black Swan of the future banking crises has been and has been topic. Well with the potency of one Trillion dollars in reduced lending power with the call of Increased Tier 1.. This could be a huge disinflation events for Major Banking ,, Esp New York, London , Germany and Swiss banks..They all lack capital.. Dispute the facts: A: last Bank stress test in Europe was a joke. B; Concentration of lower prices have added to the problem of office space and store (retail space)Backed Loans are carried at book dispite the fact that many are 30-40% overvalued on the books. C: Piigs are almost 50% overpriced on real-estate,, Esp houses in Spain... D: No banks has been able to raise enough Tier1 Capital except many large American banks that were forced to sell stock below book value.. Book value is overstated.. E: There is little interest in investing in banking as the future profits (ROE) could be as low as 8%,, Like the 1930's... F: Banking is going to be a lot more risk adverse then before.. Banks are not lending money but trying to keep the doors open.. at any cost.. just look at Citibank!!! Now add to that the idea of starting to pay dividends from cash given by the Federal Reserve or Bundesbanks.. ETC.!! It is a ploy to sell stock??? Most international banks have too much sovern debt at book.. Hold to maturity?? Never mark to Market on the books... I like my 2005 Red wines from the Correct(right) bank .. IE good wines at a lower price then Left Bank.. La Tour??vs Adams French Vineyards.. It is all about cutting cost and running with high Techs.. Banks like Citibank will run in the long run with better capital ratios. Price for the investor.. Haircuts..50% Just a thought, Bruce Watching M3 as bond prices will fall as interest raises.. there is a negative correlation for M3 size and 30 Year bond or 10 year T-Notes.. M3 could give banks some room to lend.. If they can raise capital. On the other hand we have too much retail space per person and Big Box use less space for each dollar in sales... It is all about cutting cost.. Attachments:
|
|
