Posts Tagged ‘Federal Reserve Bank’

Who Is the ‘One Big Bidder’ For US Treasuries?

Who Is the ‘One Big Bidder’ For US Treasuries?

Courtesy of Jesse’s Café Américain

Portrait of a private investigator

There are a number of possibilities for the identity of the non-primary dealer domestic source of enormous purchases at the longer end of the yield curve in recent US Treasury auctions.

It could be a misclassification, a branch of a bank representing a foreign power. The problem with this theory is that [they] have a particular reluctance to buy the long end of the curve.

It also could be a legitimate domestic purchaser like a pension fund compelled to match duration of obligations, as is required by a little noted ruling of the US government a couple of years ago. They might be shifting out of other long term instruments with similar durations but more risk.

It might even be PIMCO. They certain have the money as the world’s biggest bond fund, and they do offer two Treasury ETF’s which although not directly related to the buys might be relevant on a cross trade. And they have recently been talking down Treasuries in favor of corporates, which doesn’t mean anything since traders often ‘talk their book.’ Still, unless its for the ETF it is hard to justify buying the long durations straight up in size. And while PIMCO says they do not like Treasuries, Benny and the Fed said they are buying long to keep interest rates lower. Why doubt them?

And of course, it might very well be the Federal Reserve Bank, or the Treasury via the Exchange Stabilization Fund.

It could also be the one big bidder who comes in with some regularity and smashes down the price of precious metals with the obvious intent of manipulating the market like clockwork just after the PM fix in London.

It might even be the big bidder who stands ready to buy the SP futures market at every turn, maintaining a floor on the market and a steady drift higher in prices with no change in fundamental underpinnings. Their hand in the market is apparent.

It is less probable, given the state of market manipulation by a few big proprietary trading desks riding another wave of cheap FEd money, but it might even be the party that entered the US equity market yesterday at 12:03 PM with a HUGE order (228,000…
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Time To Indict Geithner For Securities Fraud

Time To Indict Geithner For Securities Fraud

Courtesy of Mish

The web of known parties guilty of fraud, coercion, or securities manipulation keeps getting bigger. Please consider N.Y. Fed Told A.I.G. Not to Disclose Swap Details.

The Treasury Department announces a new partnership with the Department of Education in Washington

Starting in November 2008, the Federal Reserve Bank of New York under Timothy Geithner began urging American International Group, the huge insurer that the government had bailed out, to limit disclosure on payments made to banks at the height of the financial crisis, e-mail messages obtained by DealBook show.

The e-mail exchange between the bailed-out insurance giant and its regulator portray a strange reversal of roles, with A.I.G. staff arguing for the disclosure of certain details on payments for credit-default swaps to major banks, only to be discouraged by officials at, or representing, the Federal Reserve.

In a draft of one regulatory filing, A.I.G. stated that it had paid banks — including Goldman Sachs Group, Merrill Lynch, Société Générale and Deutsche Bank — the full value of C.D.O.’s, or collateralized debt obligations, that they had bought from the company.

In the response to that draft from the law firm Davis Polk and Wardwell, which represented the New York Fed, that crucial sentence was crossed out, and did not appear in the final version filed on Dec. 24, 2008.

In a March 12 e-mail message whose subject line is “Fw: counterparties” — importance: “high” — Kathleen Shannon, a senior vice president at A.I.G., writes:

“In order to make only the disclosure the Fed wants us to make, which we understand to be to not include the CUSIPs or Tranche names and give the amounts by counterparty on a total rather than a transaction by transaction basis, we need to have a reasonable basis for believing and arguing to the SEC that the information we are seeking to protect is not already publicly available.”

The messages were initially obtained by Representative Darrell Issa, Republican of California and ranking member of the House Oversight and Government Reform Committee, and first reported by Bloomberg News.

“It appears that the New York Fed deliberately pressured AIG to restrict and delay the disclosure of important information to the S.E.C.,” Representative Issa said in an e-mailed statement.

Mr. Geithner, for his part, has defended the A.I.G. rescue, saying he had no choice but to pay full value


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The REAL Battle Over America’s Banking System

The REAL Battle Over America’s Banking System

Courtesy of Washington’s Blog

piggy banks from crestock New York Versus the Rest of the Country

If you are happy with the banking system, and don’t think it needs to be reformed, then you probably work for one of the banks headquartered in New York.

Indeed, the banks outside of New York have acted much more conservatively, used more conservative capital ratios and less leverage and gotten less involved in credit derivatives and other speculative investments.

Buy a banker in the Midwest a drink, and he will probably rail against the giant New York banks for causing the financial crisis, costing the smaller, better run banks a lot of money and huge fees, and driving many smaller banks out of business.

And even within the Federal Reserve, what the New York Fed and Bernanke are saying is wholly different from what the heads of the regional Fed banks are saying. The Fed banks in Philadelphia and Kansas City and Dallas and elsewhere disagree with what the New York Fed and Fed’s Open Market Committee are doing. See this and this.

So the battle isn’t between bankers versus outsiders. It is between the giant New York money-centered banks and the rest of the country.

Reserve Requirements

Congresswoman Kaptur said last week:

We used to have capital ratios. We need to get back to them. Ten to one. For every dollar in your bank, you can lend ten. You know what J.P. Morgan did? A hundred to one. And then with derivatives, who knows how much?

Remember, Milton Friedman – the monetary economist worshipped as the guy with all of the answers in the latter part of the 20th century – advocated for 100% reserves.

Forget 100 to 1 or even 10 to 1. Friedman said the capital ratio should be 1 to 1, where banks only lend out the amount they actually have as deposits on hand.

Friedman has been deified as the economist to follow. But his views on reserve requirements have been completely ignored.

windfall, moneyfromsky, crestockMoney Out of Thin Air

Congresswoman Kaptur also said last week:

Banks have the power to create money. And decide how much that is worth.

What is Kaptur talking about?

Here Comes the Judge

Well, in First National Bank v. Daly (often referred to as…
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Phil's Favorites

Federal Reserve plans to raise interest rates 'soon' to fight inflation: What that means for consumers and the economy

 

Federal Reserve plans to raise interest rates ‘soon’ to fight inflation: What that means for consumers and the economy

All eyes are on Fed Chair Jerome Powell as the central bank prepares to raise rates for the first time in three years. Brendan Smialowski/Pool via AP

Courtesy of Alexander Kurov, West Virginia University and Marketa Wolfe, ...



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Zero Hedge

'Milkflation' Fears Mount As Supply Dwindles, Dairy Group Warns

Courtesy of ZeroHedge View original post here.

Breakfast is the most important meal of the day, as it replenishes the body's supply of glucose to boost energy until lunch while providing other essential nutrients. The first meal of the day usually consists of eggs, bacon, toast, fresh-squeezed orange juice, coffee, and milk. 

Today, breakfast foods are becoming expensive as ...



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ValueWalk

Starvine Capital Corporation 2021 Commentary

By Jacob Wolinsky. Originally published at ValueWalk.

Starvine Capital Corporation annual commentary for the year ended December 31, 2021.

Q4 2021 hedge fund letters, conferences and more

Dear Fellow Investor:

For the calendar year ended December 31, 2021, fully invested accounts in the Flagship Strategy increased 48.4% to 49.3%, while fully invested accounts in the Mid-Large Cap Strategy increased 43.7% to 45.5%. During the period, the S&P TSX Total Return Index1 increased 25.1% an...



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Kimble Charting Solutions

Are Energy Stocks Suggesting Long-Term Strength Here?

Courtesy of Chris Kimble

Energy stocks spent the decade of 2010 to 2020 mired in weakness… but is that trend coming to an end?

The past two years have seen the Energy Sector (XLE) surge as Crude Oil has rallied back over $80.

Today’s chart is a long-term “weekly” ratio chart of the Energy Sector to S&P 500. And this chart may be illustrating why energy stocks may be ready to out-perform in the weeks/months/years ahead.

As you can see, the XLE/SPY ratio formed a strong bottoming pattern over the past 24 months. And now the ratio is breaking o...



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Biotech/COVID-19

How mRNA and DNA vaccines could soon treat cancers, HIV, autoimmune disorders and genetic diseases

 

How mRNA and DNA vaccines could soon treat cancers, HIV, autoimmune disorders and genetic diseases

Nucleic acid vaccines use mRNA to give cells instructions on how to produce a desired protein. Libre de Droit/iStock via Getty Images

Courtesy of Deborah Fuller, University of Washington

The two most successful coronavirus vaccines developed in the U.S. – the Pfizer and Moderna vaccines – are both mRNA vaccines. The idea of using genetic material to produce an immune response has opened up a world of research ...



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Politics

5 things to know about why Russia might invade Ukraine - and why the US is involved

 

5 things to know about why Russia might invade Ukraine – and why the US is involved

Courtesy of Tatsiana Kulakevich, University of South Florida

U.S. President Joe Biden said on Jan. 19, 2022, that he thinks Russia will invade Ukraine, and cautioned Russian president Vladimir Putin that he “will regret having done it,” following months of building tension.

Russia has amassed an estimated 100,000 troops along its border with Ukraine over the past several months.

In mid-January, Russia began moving ...



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Chart School

Bitcoin Swings Down to Support

Courtesy of Read the Ticker

Come on! Seriously do you think a 400% rally for Bitcoin was going to be given to the public easily. Without any pain! Come on muppets!



The uniformed (public) buy when price is rising or breaking new highs, the informed buy when price is falling or breaking lows.



The informed have to do it this way as they are large volume players and the only way they can buy large volume is to create chaos. The chaos brings to the market the weak holders and a forced sell. Price is moved to where the volume can be accumulated, in a bull trend that is down to critical support.



Of course if price is in a true bull market the 'chaos' created should not break critical long term trend signals, ...



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Digital Currencies

The metaverse is money and crypto is king - why you'll be on a blockchain when you're hopping

 

The metaverse is money and crypto is king – why you’ll be on a blockchain when you’re virtual-world hopping

In the metaverse, your avatar, the clothes it wears and the things it carries belong to you thanks to blockchain. Duncan Rawlinson - Duncan.co/Flickr, CC BY-NC

Courtesy of Rabindra Ratan, Michigan State University and Dar Meshi, Michigan State University ...



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Promotions

Phil's Interview on Options Trading with TD Bank

TD Bank's host Bryan Rogers interviewed Phil on June 10 as part of TD's Options Education Month. If you missed the program, be sure to watch the video below. It should be required viewing for anyone trading or thinking about trading using options. 

Watch here:

TD's webinar with Phil (link) or right here at PSW

Screenshots of TD's slides illustrating Phil's examples:

 

 

&n...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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