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Post by brosin on Feb 23, 2011 18:55:27 GMT -5
The new numbers get relesed tomorrow - call me "intrigued" to see them
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Post by brosin on Feb 24, 2011 20:33:50 GMT -5
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Post by brosin on Feb 24, 2011 20:54:38 GMT -5
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Post by brosin on Mar 24, 2011 16:26:10 GMT -5
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Post by ccash04 on Mar 24, 2011 16:30:18 GMT -5
what frightens me is how the SPY is up .31% an hour after the market closes!! we go to the moon!
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Post by im2buzzi on Mar 24, 2011 16:30:33 GMT -5
What are the reasons they could benefit from holding on to these reserves?
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Post by deadmoney95 on Mar 24, 2011 16:44:22 GMT -5
a year and a half old, but still relevant: www.newyorkfed.org/research/staff_reports/sr380.pdfWhy Are Banks Holding So Many Excess Reserves? excerpt: The examples show that the answer to the question in our title is actually quite simple. The total level of reserves in the banking system is determined almost entirely by the actions of the central bank and is not affected by private banks’ lending decisions.The liquidity facilities introduced by the Federal Reserve in response to the crisis have created a large quantity of reserves. While changes in bank lending behavior may lead to small changes in the level of required reserves, the vast majority of the newly-created reserves will end up being held as excess reserves almost no matter how banks react. In other words, the quantity of excess reserves depicted in Figure 1 reflects the size of the Federal Reserve’s policy initiatives, but says little or nothing about their effects on bank lending or on the economy more broadly.
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Post by jack on Mar 24, 2011 16:46:56 GMT -5
We should get our ol colleague jagmandu to weigh in on this subject - he's now a bank official
Somebody pose the question and I'll e-mail it to him.
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Post by deadmoney95 on Mar 24, 2011 16:53:44 GMT -5
dear jagmandu:
Do the ever-increasing levels of excess bank reserves mean armageddon, or is it the natural and relatively innocuous result of quantitative easing coupled with the paying of interest on said reseraves, per the NYFED's 2009 analysis?
yours sincerely,
fastopia
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Post by brosin on Mar 24, 2011 17:16:22 GMT -5
Yeah that's unbiased
I don't even know why I bother
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Post by jack on Mar 24, 2011 17:25:58 GMT -5
dear jagmandu: Do the ever-increasing levels of excess bank reserves mean armageddon, or is it the natural and relatively innocuous result of quantitative easing coupled with the paying of interest on said reseraves, per the NYFED's 2009 analysis? yours sincerely, fastopia Got it and will shortly be on its way...
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Post by jack on Mar 24, 2011 17:32:50 GMT -5
Here's what I sent him: John - the Gang would appreciate your response: Do the ever-increasing levels of excess bank reserves mean armageddon, or is it the natural and relatively innocuous result of quantitative easing coupled with the paying of interest on said reseraves, per the NYFED's 2009 analysis? www.newyorkfed.org/research/staff_reports/sr380.pdfWhy Are Banks Holding So Many Excess Reserves? excerpt: The examples show that the answer to the question in our title is actually quite simple. The total level of reserves in the banking system is determined almost entirely by the actions of the central bank and is not affected by private banks’ lending decisions. The liquidity facilities introduced by the Federal Reserve in response to the crisis have created a large quantity of reserves. While changes in bank lending behavior may lead to small changes in the level of required reserves, the vast majority of the newly-created reserves will end up being held as excess reserves almost no matter how banks react. In other words, the quantity of excess reserves depicted in Figure 1 reflects the size of the Federal Reserve’s policy initiatives, but says little or nothing about their effects on bank lending or on the economy more broadly. yours sincerely, fastopia P.S....and tell me - is lending to deserving applicants by your institution getting any better or is it still constipated?
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Post by jack on Mar 24, 2011 17:40:40 GMT -5
Yeah that's unbiased I don't even know why I bother Oops...didn't realize I needed to coordinate that before sending shit! You know when I was managing a program and had an issue like this I'd put the main protagonists in a locked room for a few days and see who came out alive.
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Post by jack on Mar 24, 2011 17:49:46 GMT -5
Yeah that's unbiased I don't even know why I bother Okay - put the issue down in as succinct a manner as possible Bros and I'll pass it along to Jag as well...will be interesting to see that. A HUGE part of problem-solving is about first defining the problem
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Post by jack on Mar 25, 2011 14:34:37 GMT -5
Here's John's answer fyi: Jack, please give my best to the good people of Fastopia. It seems to me that the NY Fed has it right, the excess liquidity was/is driven by Fed Policy, rather than by the actions of individual banks in the aggregate. Looking at bank balance sheets, comparing pre-crisis to the latest available from FDIC (Q4 2006 to Q4 2010), assets increased nearly $1.5 trillion while banks showed virtually no growth in loans. Growth came in liquid assets (cash on hand, securities, fed funds sold, and deposits in other institutions) and to a lesser extent, in bank capital (owner’s equity). This excess level of liquidity is the “Excess Reserves” you’ve been discussing, which is only indirectly impacted by Basel 3. B3 is set to bolster banks’ capital, moderate leverage, and initiate minimum liquidity ratios to meet emergency funding needs. It seems that the current excess reserves, in aggregate, well exceed contemplated liquidity hurdles. To my perception, it’s not so much that banks are “sitting on” these reserves, as there is an absence of loan demand from qualified borrowers. In my market, I’ve seen very few corporate income statements that don’t reflect adverse results due to the recent economic downturn. Businesses are not growing and households (to the extent they can) are deleveraging. That said, things have changed – scrutiny/pressure from bank regulators has all but ceased development lending in my region – regulators view nearly all such loans as excessively speculative, regardless of history/quality of the developer and the details of the project. If the regulators don’t like my loan, they slap a “Substandard” label on it, which causes me to set aside reserves against potential future losses, which impairs my earnings, which impairs my capital, which impairs my ability to make the next loan (due to capital leverage constraints). Rays of hope: 1) delinquency and charge-offs have slowed. 2) 2010 seems to show corporate results improved over 2009. 3) In my market, PNC and M&T have become more aggressive lenders. 4) In my region, Wells Fargo is expanding lending and credit staff. 5) Real estate cap rates are declining (reflects perception of less risk, results in higher valuations for commercial real estate). Remaining hurdles: 1) jobs 2) jobs 3) jobs 4) Until current optimism becomes historical fact, bank regulators will not ease pressure on banks – I’m not talking about pressure to lend, it is pressure to rein it in, and “protect the house”. John Historic Reserves www.federalreserve.gov/releases/h3/hist/h3hist5.pdfHistorical table of excess reserves. Excess reserves have climbed rapidly since 9/2008. Factors Supplying Reserve Balances www.federalreserve.gov/releases/h41/hist/h41hist2.pdfNearly all of increases from Reserve Bank advances to banks. Factors Absorbing Reserve Balances www.federalreserve.gov/releases/h41/hist/h41hist7.pdfNearly all absorption in circulating currency, and bank deposits adding liquidity to the economy. Historic Bank Balance Sheets www.federalreserve.gov/releases/h8/current/default.htmLittle increase in overall bank assets or loans, Annualized and Seasonally adjusted Charge-off Rates www.federalreserve.gov/releases/chargeoff/chgallsa.htmIt appears we are past the worst of credit quality. Annualized and Seasonally adjusted Delinquency Rates www.federalreserve.gov/releases/chargeoff/delallsa.htmIt appears we are past the worst of credit quality. Bank Balance Sheets www2.fdic.gov/qbp/timeseries/BalanceSheet.xls John
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Post by kbk3ck on Mar 26, 2011 23:37:23 GMT -5
Sounds like ya coulda posted that the answer was just common sence. LOL
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Post by jack on Mar 27, 2011 10:22:53 GMT -5
Sounds like ya coulda posted that the answer was just common sence. LOL The problem with that Joe is that no two people share a common understanding. lol!!!
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Post by cosmic on Mar 27, 2011 11:30:16 GMT -5
It seems it's at least 2 things... People afraid to borrow, AND banks hesitant to lend. Perfect storm.
But also, they are building and holding those reserves. I tend to think they think there's another Doom wave coming.
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Post by brosin on Apr 8, 2011 9:53:49 GMT -5
Newest release was yesterday after the market close For those who are saying that the increase in ERs is solely due to POMO, here's the numbers starting in November when ERs started to head up (they have been headed up ever since). I find the claim to be clearly incorrect (only 1 out of the 10 last releases has seen a strong correlation where ERs and POMO dollars submitted were even close to eachother). Flame away When ERs go up LESS than the POMO dollars submitted, it is a sign that banks are putting that money to work, i.e. TAKING RISK (I labeled them in green). When ERs go up MORE than the POMO dollars submitted, it is a sign that banks are not only NOT TAKING RISK, but they are gathering *extra* liquidity for whatever they are concerned about (I labeled them in red). 11/17/10-11/30/10: ERs +$12.6 Billion / POMO +$43.6 Billion (ERs decreased by $31 Billion)12/1/10-12/14/10: ERs +$46 Billion / POMO +$49.9 Billion (ERs decreased by $3.9 Billion)12/15/10-12/28/10: ERs (-$33.6 Billion) / POMO +$48.4 Billion (ERs decreased by $82 Billion)12/29/10-1/12/11: ERs +$18.2 Billion / POMO +45.9 Billion (ERs decreased by $27.7 Billion)1/12/11-1/26/11: ERs +$31.6 Billion / POMO +52.3 Billion (ERs decreased by $20.7 Billion)1/27/11-2/9/11: ERs +$51.4 Billion / POMO +$52.5 Billion (ERs decreased by $1.1 Billion)2/10/11-2/23/11: ERs +$125.1 Billion / POMO +46.1 Billion (ERs increased by an additional $79 Billion)2/24/11-3/9/11: ERs +$78.2 Billion / POMO +$57.2 Billion (ERs increased by an additional $21 Billion)3/10/11-3/23/11: ERs +70.7 Billion / POMO +$39.9 Billion (ERs increased by an additional $30.8 Billion)3/24/11-4/7/11: ERs +$65 Billion / POMO +$53.8 Billion (ERs increased by an additional $11.2 Billion)
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Post by novice08 on Apr 8, 2011 10:20:17 GMT -5
Great info again, bros...thanks.
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Post by cosmic on Apr 8, 2011 13:45:43 GMT -5
Bros, I'm going to post this chart in this thread also because I think it is the Doom they're waiting on. Uploaded with ImageShack.us
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Post by brosin on Jun 2, 2011 21:27:28 GMT -5
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Post by kbk3ck on Jun 2, 2011 21:35:30 GMT -5
Yall talk way over my head again and explain what this has to do with the POTIC?
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Post by brosin on Jun 2, 2011 21:40:36 GMT -5
Speculative dollars have been racing into commodities and stocks trying to get ahead of the inflation that they think is coming right out of these ERs
Unfortunately, that's not how it's going to play out IMO; sovereign debt crisis losses and much more mortgage write downs will make all this money -- that we are hoping goes into the economy -- go poof when they just go to write downs and offset losses. In other words, we'll never see it again. Taxpayers would then be out $1.5T. Even if the Bernank ever wanted to sell its massive treasury or mortgage holdings back to the banks, there won't be nearly enough money to buy them. Something tells me we will get further bailed out by China and the emerging markets, with heavy strings attached
I do not like where I see this heading - not at all... debt forgiveness for most western countries may not be all that far off after all. I thought it was going to be at least 5-10 years out soon before we would see the economic order shift
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Post by brosin on Jun 2, 2011 21:41:42 GMT -5
Yall talk way over my head again and explain what this has to do with the POTIC? not sure? where is POTIC mentioned
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Post by novice08 on Jun 2, 2011 21:42:40 GMT -5
What's the potic? I've gone from thinking hyperinflationary depression to just plain depression...like you, Brosin, I was thinking/hoping it would be at least 3-5 yrs. away, but the cylce analysis suggests 2012. I have hand-written notes from a great cycle theorist, Bud Kress (the Kress cycles). I am going to pull his exhibits out and revisit them. These are from last April/May...
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Post by kbk3ck on Jun 2, 2011 22:26:03 GMT -5
EVERYTHING has something to do with the POTIC!!!!
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Post by maxi on Jun 2, 2011 22:59:16 GMT -5
EVERYTHING has something to do with the POTIC!!!! Joe are u typoing again? Do u mean POTUS?
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Post by Rich on Jun 2, 2011 23:00:38 GMT -5
PATOMAC
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Post by kbk3ck on Jun 3, 2011 2:42:34 GMT -5
Price Of Tea In China. ;D
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