I'm under the impression that $75 billion pumped into banks this Monday via Fed TAF will allow banks to invest heavily. Just a hunch but I believe the stock market should do very good, along with bonds and commodities. So I'm calling Crude 140 by Friday. I realize this thread could very well symbolize a top in crude, but I just had to sharemy thoughts on how this TAF is great for banks at the expense of everyone else.
FED is slowly running out of treasury bills, they have already used 1/3rd of the FED collateral. Down another $21B this last week alone. http://www.newyorkfed.org/markets/soma/sysopen_accholdings.html Security Type Total Par Value US Treasury Bills (T-Bills) 49,609,742 US Treasury Notes and Bonds (Notes/Bonds) 421,816,020 US Treasury Inflation-Indexed Securities (TIIS)1 39,170,613 Total SOMA Holdings 510,596,374 Change From Prior Week -21,144,117
TLSF is the facility for exchanging treasury bills for subprime garbage and has the $800 billion limit. The TAF exchanges cash for subprime garbage, and has no limit. But it is indeed absolutely amazing that the Fed would release such a large portion of it's balance sheet on Bernanke's theories. It would make a good horror movie.
TAF is also a bailout of hedge funds via prime broker arm of I Banks - allowed deferral of hedge fund deleveraging/redemption slales i.e deferral of normal end of cycle deleveraging. Bernanke is out pof control, he has spent his whole academic non real world life myopically studying the Great depression and concluding that because they did not cut rates that was the cause of the depression, without it seems looking at Japan where they cut rates and operated the same no bank failure policy he is putting in place now. Welcome to the Great Depression as per Japan complements of the myopic academic buffoon.
not a big fan of greenspan 1.0 or greenspan 1.1 benny b-52 has little choice in what he was handed and how to deal with it it's a slow motion crash versus some banking shutdown and everybody rushes the food stores and empties them out banks restrict you to $250 withdrawals per day...etc. may happen anyway
A measly bid cover ratio of 1.13 at a puny stop-out rate of 2.1% is evidence that the market is saturated with cash.
The TSLF has a stop-out rate of .1% I'm really confused as to why. IS TAF for the banks only while TSLF open to IBs?