350zCommtech's Account Talk

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anidoc said:
350,
did you check out the link at the bottom of my last post? Similar "hypothetical" scenario for US. Maybe not so far-fetched after all if the UK is doing it already!
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Yup, the UK is doing it. Preparing for a depression? Wow, scary indeed.....

U.K. government seeks power to buy companies

...........
 But the legislation would also give the government general power to acquire shares or assets and liabilities of other institutions too, he added.
........http://www.marketwatch.com/news/sto...3E-5227-4B75-807E-427F77C149E6}&dist=hplatest
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Should I, dare I,
Can't resist,
I hafta see what CRAMER has to say about the Northern Rock bail-out!!
T -4 min...
Gotta be good for a laugh! :nuts::D:sick:
VR
 
Tomncath said:
Well, while your waiting I'd like to get Z's take on this post by Miss Piggy in the Economy forum yesterday. :worried:

http://www.tsptalk.com/mb/showthread.php?t=5567
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Yeah, that H3 report has been floating around the web. It has to do with the TAF.

Here's an explanation from the Fed:

Recent Declines in Nonborrowed Reserves

The H.3 statistical release indicates that nonborrowed reserves of depository institutions have declined substantially since mid-December to a level that is now negative. This development reflects the provision of a large volume of reserves through the Term Auction Facility (TAF) and has no adverse implications for the availability of reserves to the banking system.
By definition, nonborrowed reserves are equal to total reserves minus borrowed reserves. Borrowed reserves are equal to credit extended through the Federal Reserve's regular discount window programs as well as credit extended through the TAF. To maintain a level of total reserves consistent with the Federal Open Market Committee's target federal funds rate, increases in borrowed reserves must generally be met by a commensurate decrease in nonborrowed reserves, which is accomplished through a reduction in the Federal Reserve's holdings of securities and other assets. The negative level of nonborrowed reserves is an arithmetic result of the fact that TAF borrowings are larger than total reserves.http://www.federalreserve.gov/releases/h3/nonborrowedreserves.htm
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IMO, the bond insurer situation is the key. We should know some time this week. The choices for the IB's are either, a lot more writedowns or a hell of a lot more writedowns.

This is going to happen soon:
 
The War has begun. There will be blood...
http://biz.yahoo.com/ap/080218/subprime_wall_street.html

Skeletons will be uncovered...
"This could get a lot nastier, for many reasons," said John Akula, a business law lecturer at the Massachusetts Institute of Technology's Sloan School of Management. "Prolonged close scrutiny often turns up all kinds of dubious practices that in normal times are under the radar.

This is only the beginning.
Will probably go 100% G Tue...I get the distinct feeling a strong rally will be sold, and it could be the last straw and start a capitulation. IMO...you would be wise to take advantage of the "no economic data" Tuesday before the proverbial waste products encounter the spinning air distributor...ESPECIALLY since futures are up so strong (why???).
 
C'mon you heard the Fed...
TRUST IN ME...
jungle_book_snake.jpg

NO RECESSION. :notrust:
Corepuncher said:
...ESPECIALLY since futures are up so strong (why???).
Click to expand...
 
anidoc said:
Sounds like a lot of double-talk to me but the bottom line is...In other words they are doing the same thing as the UK is with National Rock, just in a different way?
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Well, not yet anyway, but they might be getting ready too. As Fivetears suggested, you can't trust these crooks, including the Fed.

As for the negative unborrowed reserves, the Fed's explanation sounds plausible, but what does it say about the recent TAF actiivites?

I have to admit that I'm no expert on this stuff, but my understanding of the TAF is that it's basically an easier, more discrete discount window. Back in August, either the banks didn't want to use the discount window or their collateral was not good enough to allow them to.

What ever the case, the Fed shortly came up with TAF. I could be wrong on this but I believe the TAF accepted mortgage backed securities as collateral.

So, according to the Fed, the reason for the negative non-borrowed reserves is due to a lot of borrowing going on at both the discount window and at the TAF. My suspicion tells me it's probably more at the TAF.

The question you have to ask yourself is why so much borrowing?:D
 
350zCommTech said:
So, according to the Fed, the reason for the negative non-borrowed reserves is due to a lot of borrowing going on at both the discount window and at the TAF. My suspicion tells me it's probably more at the TAF.

The question you have to ask yourself is why so much borrowing?:D
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$50B borrowed!

Banks "quietly" borrow $50 billion from Fed: report
updated 4:47 a.m. CT, Tues., Feb. 19, 2008

NEW YORK (Reuters) - Banks in the United States have been quietly borrowing "massive amounts" from the U.S. Federal Reserve in recent weeks, using a new measure the Fed introduced two months ago to help ease the credit crunch, according to a report on the web site of The Financial Times. The newspaper said the use of the Fed's Term Auction Facility (TAF), which allows banks to borrow at relatively attractive rates against a wide range of their assets, saw borrowing of nearly $50 billion of one-month funds from the Fed by mid-February.

The Financial Times said the move has sparked unease among some analysts about the stress developing in opaque corners of the U.S. banking system and the banks' growing reliance on indirect forms of government support.
(Reporting by Mark McSherry; Editing by Valerie Lee)
Copyright 2008 Reuters.http://www.cnbc.com/id/23227404/for/cnbc/
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I'm staying in G. CPI tomorrow might not be good for the F fund. Treasury auction on Thursday might also be bad for the F fund.

New York Bond Costs Rise as Banks Let Auctions Fail (Update3)
By Michael Quint

Feb. 19 (Bloomberg) -- New York state taxpayers' weekly borrowing costs increased $2.3 million after banks failed to attract bidders to auction-rate bonds and stopped buying unwanted securities.
Interest rates on Dormitory Authority bonds sold for the City University of New York rose to as high as 6.26 percent last week from 3.42 percent on Feb. 6, according to data compiled by Bloomberg. Buffalo's rate on water system revenue bonds soared to 11 percent from 3.30 percent. Bonds issued by the Museum of Modern Art climbed to 4.47 percent on Feb. 13 from 3 percent at the end of January.

Rates in the $330 billion auction-rate bond market are rising nationwide after banks from Citigroup Inc. to Goldman Sachs Group Inc. stopped bidding for the debt at periodic sales they oversee, according to Bloomberg data. New York, with $4 billion of auction debt, may convert the bonds to a fixed rate or a different type of variable-rate security, state budget director Laura Anglin said in an interview in Albany last week.

``It hurts,'' said Anthony Farina, executive assistant in the Buffalo comptroller's office. Interest costs on the $63 million of auction-rate bonds rose $93,000 for the week, he said. ``Nobody expected this kind of jump.''
Auction-rate bonds are long-term debt with interest rates that reset according to bids submitted through securities firms every seven, 28 or 35 days. When there aren't enough bids, the auction fails, and the rate is set at a level spelled out in bond documents and investors are left holding bonds they expected to sell.http://www.bloomberg.com/apps/news?pid=20601087&sid=a._AHo3V_zzA&refer=home
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2/14/07:
350zCommTech said:
I'm getting out of the F fund at a loss. TNX is breaking out of a bullish flag. A close here will mean higher yields.
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This morning:
350zCommTech said:
I'm staying in G. CPI tomorrow might not be good for the F fund. Treasury auction on Thursday might also be bad for the F fund.
Click to expand...

I just read Tom's daily comments, where he explained why he went to the F fund for tomorrow. Here's my take on the F fund:

View attachment 3341

TNX broke out of a bullish flag pattern and found support at the 50dma. My entry target is TNX at 4.05%.

View attachment 3342

I will also look for TYX to hit 4.775%, the 200dma. Since the Asians are selling tonight, the 10yr yield might already be falling, but tomorrow's CPI could push yields up again tomorrow. The big key however, could be Thursday's bond auction. A failure on Thursday could send yields up to my target, for entry into the F fund.
 
Thanks for warning about the I and the F funds last few days,I jumped in then jumped out the I fund after seeing your post.Thanks a million. do you think tomorrow reports will be really bad? appriciate your opinion as always.Thx
 
Seeing a lot of volatility in bonds this morning. Yields initially jumped up on higher than expected CPI, but fell as the markets sold off. As TNX dropped, it found support again at the 50dma. The F fund is currently down 1 cent.

The path of least resistance for bond yields is up but I'm not so sure what is going to happen tomorrow. There's a bond auction tomorrow, if that goes bad, TNX could move up to my target of 4.05%. The other factor is the market. It bounced of the bottom of the triangle this morning and will probably test it again. If it breaks through this afternoon or tomorrow, yields will drop.

View attachment 3343
 
zimmy said:
Thanks for warning about the I and the F funds last few days,I jumped in then jumped out the I fund after seeing your post.Thanks a million. do you think tomorrow reports will be really bad? appriciate your opinion as always.Thx
Click to expand...

You're welcome zimmy,

I expect a bounce in tomorrow's jobless claims and the Philly Fed, but I doubt they'll surprise any body.

I think this afternoon's FOMC minutes will be a market mover. I just don't know which way. But just looking at the technicals, they are telling me to get in the I fund for tomorrow.

The VIX for example, since hitting the 20dma this morning, it has been dropping. If the FOMC minutes disappoints and we get more selling, the 20dma on the VIX will probably act as support for the markets this afternoon and maybe tomorrow.
 
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