ND
SEP 17 19 SIT EC y POL
ND denounce Global-neoliberal debacle y propone State-Social
+ Capit-compet in Eco
ZERO HEDGE ECONOMICS
Neoliberal globalization is over. Financiers know it, they
documented with graphics
While it is being ignored by most (because the S&P
didn't crash), the chaos in the Fed-controlled short-term liquidity markets
should panic everyone as for the first time in a
decade, NYFRB was forced to inject liquidity for o/n repo...
See Chart:
Effective FED found rate IOER This
not suppose to happen!
Repo rates kept rising despite the
Fed's operation...
And before we move on to the rest of the markets, let's put today's repo chaos in
context. As
Monday Morning Macro notes, Here are a few “large”
moves that markets have seen over the past few weeks. Notice anything that stands out?
See Chart:
NOTE - the ramp was all about getting the S&P and Nasdaq and
Small Caps back to even on the week
Energy stocks erased a big chunk of
yesterday's gains as oil prices slipped back lower...
See Chart:
Bank stocks rolled over after 8
straight days higher...
See Chart:
"Most Shorted" stocks
tumbled at the open - no squeeze today - but bounced after Europe closed...
See Chart:
Treasury yields extended their
decline today with 30Y now down over 10bps since Friday's close
See Chart:
Meanwhile, WeWork 2025 bonds price crashed...
See Chart:
The Dollar Index puked pretty hard
today, erasing all of yesterday's gains... felt
See Chart:
Bloomberg Dollar Index
Finally: Prepare yourself for higher
pump prices...
….
SOURCE
….
SOURCE: https://www.zerohedge.com/markets/repo-calypse-ruins-bank-run-oil-mageddon-ripples-through-markets
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The first
shot toward QE4 was just fired.
Update 4: It's over: after a torrid 30
minutes in which the NY Fed first announced a repo operation, then announced
the repo was canceled due to technical difficulties, then mysterious the
difficulties went away just minutes later, at precisely 10:10am, the Fed
concluded its first repo operation in a decade, which while not topping out at
the $75 billion max, was nonetheless a
significant $53.15 billion, split as follows:
- $40.85BN with TSYs as collateral at a 2.1% stop out rate
- $0.6BN with Agencies as collateral at a 3.0% stop out rate
- $11.7BN with Mortgage-backed securities as collateral at a 2.1% stop out rate.
See Chart:
1. Old school
funding pressure lessons: repos & outrights
Pre-crisis the Fed relied on two types of open market
operations to manage funding markets and their balance sheet: (1) temporary
repo or reverse repo operations (2) outright UST purchases. Repo operations
were used to "fine tune" the amount of reserves in the banking system
to hit the fed funds target rate while outright UST purchases were used to
offset currency in circulation growth. As a reminder,
currency growth - of which we have seen a dramatic increase in recent years as
the amount
of $100 bills in circulation has soared - eats
away at reserves in the banking system; this would pressure fed funds higher if
the Fed did not growth their balance sheet to offset this (Exhibit 1).
See Exhibit 1
FED must increase assets on balance
sheet to offset currency growth
Temporary repo operations were executed in the tri-party
market and were conducted only with primary dealers. Historically, repos were
- multiple price and fixed amount
- announced only at the outset of the open market operation
- executed across Treasury, agency debt, & agency MBS collateral types (Chart 1).
The Fed provides data on repo operations starting in July
2000. An increase in Fed repo operations corresponds to
a similar increase in reserves, all else equal (Exhibit 1).
See Chart:
REPO accepted , monthly by
collateral time ($bill)
Temporary repo operations were executed in the tri-party
market and were conducted only with primary dealers. Historically, repos were
- multiple price and fixed amount
- announced only at the outset of the open market operation
- executed across Treasury, agency debt, & agency MBS collateral types (Chart 1).
According to Barclays to address the expected increase in
fed funds volatility, the
Fed, having ended the balance sheet runoff this summer instead of waiting until
September, could create a standing repo facility - something which has been rumored for months - or conduct
standard open market operations, injecting even more liquidity into the system.
But
as we noted earlier, the problem for the Fed is that following
today's massive move in repo higher, it now appears that the Fed is once again
behind the curve, and this time the funding squeeze could have dire
consequences for not only the economy but the market, as the broken repo
plumbing means that despite $1.4 trillion in excess reserves, one or more banks
are suddenly left without liquidity, which as we explained over a month ago in
"Forget
China, The Fed Has A Much Bigger Problem On Its Hands", the only
alternative Powell may soon have is to restart QE.
Fun week so far:
- Monday: biggest ever surge in oil
- Tuesday: biggest ever surge in GC repo
But stocks are near record highs, because... The Fed.
….
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S&P
also predicts there will be
"no growth" throughout 2020 and 2021.
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The global manufacturing downturn is likely to persist through 1H20...
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The "everything bubble" is not permanent.
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US
DOMESTIC POLITICS
Seudo democ duopolico in US is obsolete; it’s full of frauds
& corruption. Urge cambio
...but Trump’s firing of Bolton will hopefully represent a new purge of war mongering sociopaths while
opening the door to a new foreign
policy doctrine.
====
If people no longer trust the political/media
class, they can’t be propagandized. Without the ability to propagandize the masses, the
empire collapses...
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US-WORLD ISSUES (Geo Econ, Geo Pol & global Wars)
Global depression is on…China, RU, Iran search for State
socialis+K-, D rest in limbo
Talk of war between the two powerful countries isn’t anything new,
and anyone who is paying attention
knows that such a war would be devastating for much of the world...
====
With the U.S, Russia, and China all jostling for
position in Iraq’s oil and gas industry both north and south,
Iraq’s oil ministry last week reiterated its desire to have one or more foreign partners in the Mansuriya
gas field.
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SPUTNIK and RT SHOWS
GEO-POL n GEO-ECO
..Focus on neoliberal expansion via wars & danger of WW3
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NOTICIAS IN SPANISH
Lat Am search f alternatives to neo-fascist regimes &
terrorist imperial chaos
REBELION
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ALAI ORG
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RT EN
ESPAÑOL
- Venezuela responde a la activación del TIAR: "para la administración Trump, la paz y el entendimiento son malas noticias"
- Pence: el Ejército estadounidense está "preparado" tras los ataques a las refinerías sauditas
- Las autoridades de EE.UU. presentan una demanda contra Edward Snowden
- "El mayor crimen de la historia mundial"
- Excarcelan al diputado opositor Edgar Zambrano en Venezuela
- Michel Temer califica de "golpe" el juicio político contra Dilma Rousseff y desata la polémica en Brasil
- Keiser Report "El mayor crimen de la historia mundial"
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INFORMATION CLEARING HOUSE
Deep on the US political crisis: neofascism & internal
conflicts that favor WW3
- Armageddon on the Horizon? By Paul Craig Roberts
- Israel Will Again Deny Palestinians the Right
to Life By Amira Hass
- Our Invisible Government By Chris Hedges
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COUNTER PUNCH
Analysis on US Politics & Geopolitics
Alejandro Sanchez Inside
the Syrian Peace Talks
Mario Barrera The
Southern Strategy and Donald Trump
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GLOBAL RESEARCH
Geopolitics & Econ-Pol crisis that leads to more
business-wars from US-NATO allies
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DEMOCRACY NOW
Amy Goodman’ team
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PRESS TV
Resume of Global News described by Iranian observers..
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