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| User Info | Monday's Reverse Repo Test? in forum [Ticker] | ||||
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Genesis Posts: 66463 Incept: 2007-06-26 
Royal Flush! 
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http://market-ticker.org/archives/1530-M....
---------- I used to play flute; I wonder if I can play a fife? I incite prosecutors to create "Bubba Sausage Parking Lot" projects Darrell Issa has a middle finger and knows how to use it - Me 2009-10-21 10:58:42
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Macneib Posts: 2604 Incept: 2008-01-19 
ROK, but I'd rather be back on Boracay,
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Wait, are you guys suggesting there are no brakes on this thing??? EDIT: Karl you're doing excellent work. I don't think people can thank you enough for your tireless efforts. Last modified:
2009-10-21 11:14:31 by macneib
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Clumsygardener Posts: 32 Incept: 2009-07-17
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Quote:I don't think people can thank you enough for your tireless efforts.I know I can't. 2009-10-21 11:10:04
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Statusquojoe Posts: 2048 Incept: 2008-11-20 
Land of the fees Home of the slaves.
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Wow, they are over leveraged by a ratio of 33:1 if those figures are accurate (I don't doubt your information Karl, I am suspect of Chase's reported cash reserves.
---------- "The value of a man's opinion, is the price he has paid to have it." Author unknown. 2009-10-21 11:23:08
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Fortune Posts: 1385 Incept: 2008-04-21 A deep dark place...scary
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I asked that exact same question; are they really this dumb. The answer is irrefutably "Yes, they are". They have listened to their own BS now for so long, drank their own kool-aid for so long, that they are now fully deluded into believing their own BS. To think the PDs had available these funds after all we know and have discovered is beyond comprehension. Am shocked.
---------- It's a toss up. It is the Rule of Law that transforms assets into money: Martin Armstrong Math IS: Karl Denninger Legitimate questions deserve answers: Janet Tavakoli 2009-10-21 11:23:09
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Bananamerican Posts: 601 Incept: 2009-05-28 Anytown U.S.A. Online
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Gen, that ticker was pretty skimpy...too much teasing and a bit too cryptic for the peanut gallery...can you flesh it out? Implications?
---------- "it is then that a capitalist enterprise, when difficulties arise, throws itself like a dead weight into the state's arms. It is then that state intervention begins and becomes more necessary. It is then that those who once ignored the state now seek it out anxiously." Benito Mussolini on Fascism... Last modified:
2009-10-21 11:28:09 by bananamerican
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Macneib Posts: 2604 Incept: 2008-01-19
ROK, but I'd rather be back on Boracay,
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Banana, We're lucky enough to even get a rumor that there are table scraps on items like this. This is primarily off of ZH's site so I suggest taking a peek over there if you are looking for more speculation. 2009-10-21 11:30:29
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Eli Posts: 3786 Incept: 2007-09-10
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This sounds like a potential run of MM could commence, since it is the only place the Fed can turn to.
2009-10-21 11:42:58
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Snowman Posts: 785 Incept: 2009-03-09
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Even the Fed knows the PD's can't come up with the money, so it is time for a hail mary pass to the money market funds. Do I hear calls being made to Fidelity and Schwab? From the FT:http://www.ft.com/cms/s/0/e313ceb8-a885-.... The obvious counterparties for reverse repo deals are the Wall Street primary dealers. However, the Fed thinks they would only have balance sheet capacity to refinance about $100bn of assets. By contrast, the money-market funds have $2,500bn in assets, which means they could plausibly refinance as much as $500bn in Fed assets. Officials think there would be appetite on the part of the funds, which are under pressure from regulators and investors to stick to low-risk liquid investments. 2009-10-21 11:46:03
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Future_shock Posts: 986 Incept: 2007-10-16
Texas
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Well then some of the MMFs are going to get stuffed with Fed garbage? Who the hell wants to be the lucky fund?
2009-10-21 11:46:27
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Eli Posts: 3786 Incept: 2007-09-10
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Dear Lord, the PD's want nothing to do with the **** sandwiches they have off loaded, so the FED is going to feed them into the money markets probably by force. Contaminating the value of MMs and reducing liquidity in area that could bring down the remaining productive companies of this nation. Because the failed banks are still a big fail. 2009-10-21 12:00:46
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Lucky1 Posts: 44 Incept: 2009-08-05
Pittsburgh
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Rut-roh. Banana: To me, this means JP Morgan/Chase is at the end of their money rope; FDIC can't even resolve your local neighborhood lemon-aid stand at this point since they're flat busted; and the other posters on this board so far are right - the only other pool of available *real* funds left at this point even close to large enough to bridge the abyss are the Money Markets. Money Markets that consider parting with their investors cash here for this purpose should first consider whether this is wise...of course, the MMF Managers may just get Ken Lewise'd by Ben and Tim to convince them to participate... Might there be a quick downdraft in the stock market to rapidly increase inflows to MMF's to provide the necessary funding???? Gosh, Karl, you've made this cynic even more cynical, if that's even possible... ---------- "Crime is contagious. If the government becomes a law-breaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy." -USSC Justice Louis D. Brandeis: Dissenting Opinion in "Olmstead v. United States" (1928) 2009-10-21 12:05:30
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Trades50 Posts: 817 Incept: 2007-10-30
IL
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There are banks on every block where I live. They just built a new Chase not too far from me. Just too many of them. Chase wants to be like the McDonalds of banks. That's their theme. On every corner. Seems like McDonalds has a lot more cash than they do.
2009-10-21 12:15:18
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Taint Posts: 142 Incept: 2008-12-24 texas
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Under what conditions can the Fed impose repos on the MM community? Under what terms? Is it a form of auction? Most MM are already stuffed with MBS and related real estate securities.
2009-10-21 12:22:03
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127001 Posts: 690 Incept: 2008-05-21
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Just like some clarification on whether or not I understand this correctly. On a repo agreement, the fed provides a loan based on collateral - wioth the expectation that the loan is repaid with interest. On a reverse repo, the fed has the primary dealers take an asset and provide reserves back to the fed. at the end of the term, the fed receives the asset back and the primary dealer receives interest. The mechanism allows the manamgenet of cash in the system, liquidity or slosh if you will. The banks alledgely have some 690billion on reserve with the fed if you believe NBAR reports from the fed. If you belive balance sheets from the big banks, they are flush with "cash" as well. However, the reverse repo was a failure and the primary dealer network was unable or unwilling to take those assets back. Only two explainaiotns. 1) they are broke and the numbers are a lie. 2) they know how bad that collateral is and want no part of touching them -- This leaves with a few possibilities Why does the fed need to remove liquidity? If it is just to reduce inflationary pressure they probably have some wiggle room politically. If they have to appease foreign creditors, less so. If it is related to the treasury pulling funds - as noted here a few weeks back, even less so. - If the banks wil not provide the reserves back to the fed, there are a few places to get it. money markets being the number one target. They just recently, like just now lost their government backing guarantee. They can either force MMF managers to buy crap assets to drain liquidity, or they can start a panic in equities and force MMF's to break the buck causing a huge flight to safety. Either way they get cash. -- I am not a banker, but this is how I interpreted this data. Does anyone see any problems with my understanding of it? 2009-10-21 12:23:55
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Bananamerican Posts: 601 Incept: 2009-05-28 Anytown U.S.A. Online
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Ok, thanks for the xtra bits dudes....polluting MM funds sounds like a "no good very bad" idea.....
---------- "it is then that a capitalist enterprise, when difficulties arise, throws itself like a dead weight into the state's arms. It is then that state intervention begins and becomes more necessary. It is then that those who once ignored the state now seek it out anxiously." Benito Mussolini on Fascism... 2009-10-21 12:24:36
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Mooreupp Posts: 105 Incept: 2007-10-31
Ohio
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Truly scary. At we reset all of this, we are going to have to find a better way of making sure competent people end up in positions of power.
---------- The Constitution is the law. It is not, and was never meant to be a "living document." 2009-10-21 12:28:35
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Max2205 Posts: 43 Incept: 2009-03-06
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They get a credit and the Fed buys 'em back before the credit is due.....as you and zero hedge have posted before.....smoke and mirrors. Enron guys must be feeling pretty good bout now
2009-10-21 12:32:09
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Jstanley01 Posts: 2332 Incept: 2008-07-30
San Antonio, Texas
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Tickerguy wrote..Are people really this dumb over at The Fed?I'm hoping and praying: Big enough to FORCE an end to the 'bezzle, but not so big that our country gets sucked into a black hole. Say, the Allied Expeditionary Forces at the Battle of Normandy instead of the German Ninth Army at the Battle of Stalingrad. Hedgerow country was a bitch, but not nearly as bad as freezing to death in the snow as a prisoner of war. Hello? God? We are in dire need of a "not too hot, not too cold, just right" down here. 
---------- Come on. It's just a ****ing casino. The markets have nothing to do with reality most of the times.. until they suddenly do... -- Peezdets Last modified:
2009-10-21 12:58:55 by jstanley01
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Vmooper Posts: 1181 Incept: 2007-11-30
Bailout ville
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When oil hits $100/bbl and they close out their oil positions they will have a lot more cash. Just a blip.
---------- "If you don't know where you are going, speeding up is not the answer." -Jeff Macke "If you bail out everyone, nobody gets bailed out." -Jeff Macke "Welcome to Crazytown, population you and me baby." -Jeff Macke 2009-10-21 13:04:11
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Arw Posts: 46 Incept: 2009-03-02
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Anyway to cull an 8K to determine how much $$$ JPM, for example, has in repo's with the fed?
2009-10-21 13:14:38
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Lastchance Posts: 1011 Incept: 2008-11-19 Las Vegas
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"It appears so, and begs the question - how big of a disaster are we about to undergo?" Well, we are already in a disaster. Genesis, when you say banks are insolvent, that is spot on. The FDIC has their so-called list. If they seize the whole list on one day, the system as we know it will collapse into chaos. Now as to how big of a disaster, I still think big enough to bankrupt political subdivisions. But maybe that is a good thing, because they are no longer needed. It would seem that since the business models of many states, counties, and cities are being proven to be flawed, the management staff should be fired for cause. ---------- "Since banking is based on confidence, what happens when you destroy confidence?" Retired Admiral "Mike" McConnell 11/8/09 2009-10-21 13:28:39
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Cjworkman Posts: 5015 Incept: 2007-08-22
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33:1... hahahahahha.. that would be about halfway to blowing up Bear Sterns style. and considering they lost almost half their cash in the last YEAR... they have less than 12 months. ---------- Ben is going to create an equity bubble from excess liquidity that tops at 1200... and bottoms at 300. A bubble inside of bearish economic conditions, so that it never reaches new market highs and crashes far below the lows. - me 2009-10-21 13:31:48
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Arkady Posts: 94 Incept: 2009-10-19
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I actually never understood the zombie bank notion. Supposedly the banks are insolvent, but at one point they were flush with reserves and just unwilling to lend until they figured out the full situation of the subprime market. Now this news comes out suggests that a reverse repo failed, meaning the banks are NOT flushed with cash? Which one is it... 2009-10-21 13:32:56
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Jnojr Posts: 433 Incept: 2008-09-18
San Diego, CA.
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Quote:Under what conditions can the Fed impose repos on the MM community? Under what terms? This. Given the abysmal rate of return on my MM, I just transferred most of that money back to my credit union, where I'll still get an abysmal rate of return but at least the hope of some recovery from NCUA 2009-10-21 13:45:15
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