[Armageddon]

No matter what they call it, QE is back. The Fed's balance sheet jumped by $75 billion to $3.845 trillion in the week ended 9/18. This is just the beginning, as whatever the Fed decides to call QE4, it will be much larger and more destructive than QEs 1,2, & 3 combined. Buy Gold!


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[EdwinSm]

See https://www.bbc.com/news/business-49760502 for background on the Fed's Repo intervention.

The article includes several theories as to why the rates spiked, including an oil based one

There could be other one-off factors triggering this spike, such as an oil bet that went bad after the attack on Saudi Arabia

For the future:

Did the Fed's intervention work?

Rates dropped back following the Fed's action, and so far stock markets and other parts of the system don't appear to have been affected.

But analysts warn that the turmoil is likely continue, saying the end-of-quarter rush to square up company balance sheets could cause more stress.

[Yoshua]

"Starting next week, NY Fed will do an overnight $75BN repo every day and 3 $30BN Term repos as it expects continued overallotment."

There has been problems from the moment the Fed raised the rates and started QT.

At first the excess reserves that the banks held at the Fed started to decline. Then the Fed started to lose control of the Effective Federal Funds Rate (EFFR) and the Interest On Excess Reserves (IOER). And now they lost control of the Repo.

Something is broken.

[shortonoil]

"Starting next week, NY Fed will do an overnight $75BN repo every day and 3 $30BN Term repos as it expects continued overallotment."

There has been problems from the moment the Fed raised the rates and started QT.

At first the excess reserves that the banks held at the Fed started to decline. Then the Fed started to lose control of the Effective Federal Funds Rate (EFFR) and the Interest On Excess Reserves (IOER). And now they lost control of the Repo.

Something is broken.

The new US QE4 should work as well as the new ECB bailout package. The fact that the ECB has seen zero improvement (things over there are still getting worse) shouldn't deter the FED from trying it. Just because it didn't solve any problems the last three times (or we wouldn't be doing it again for the fourth time) is hardly an indication that it won't work this time either?

The world is dying of energy starvation, but don't tell the FED! The FED works like the pharmaceutical industry, treat the symptoms and let the patient die of the the disease. Changing their gate might knock them off their Merry Go Round. They are so sure it is going to work this time that they even changed the name from QE to POMO; even though they are exactly the same thing? Now we can say that QE failed three time, and POMO only failed once.

Anyone else noticing that the world has gone nuts!

[Armageddon]

QE, money printing, stimulus packages, ZIPR and NIRP are all they have left to keep this thing afloat. They will never raise rates again. Way too much debt to service. How long can they keep this charade going? I honestly have no idea. Much longer than I originally thought. But it sure seems like things are coming to a head. I’m sure Trump can keep the stock markets up until the election with rate cuts and more fake China agreement announcements.

Historically low rates should keep the home and auto industry afloat a little longer too.

Interesting times indeed.

[Outcast_Searcher]

"Starting next week, NY Fed will do an overnight $75BN repo every day and 3 $30BN Term repos as it expects continued overallotment."

Why not include a link for such quotes? Yes, I searched and found it, but why should everyone need to do that, select X stories to check, etc?

[Outcast_Searcher]

No matter what they call it, QE is back. The Fed's balance sheet jumped by $75 billion to $3.845 trillion in the week ended 9/18. This is just the beginning, as whatever the Fed decides to call QE4, it will be much larger and more destructive than QEs 1,2, & 3 combined. Buy Gold!

Twitter

OTOH, in the real world where facts matter:

However, in a sign a cash crunch could be easing, demand for liquidity on Friday did not significantly exceed the amount offered, as it had on two prior days.

Like I pointed out was occurring, yesterday in this thread. As I also alluded to yesterday overall:

Federal Reserve Chair Jerome Powell this week downplayed concerns about the money market's cash crunch, saying it was not a sign of problems in the wider economy or a concern for monetary policy.

Economists say an array of conditions converged to dry up liquidity in the banking system -- including quarterly corporate tax payments and a surge in government debt sold to investors, which drained cash out of banks.

https://www.ibtimes.com/ny-fed-pump-75- ... 10-2830223

Why not discuss the story in rational, balanced terms? Oh yes, fast crash doomers don't do that.

Not good news that this kind of thing happens from time to time. And as I read on CNBC today, the fact that Powell is admitting the Fed will likely need to expand its balance sheet (vs. the shrinking plans) is disappointing.

https://www.cnbc.com/2019/09/18/powell- ... rowth.html

Not the end of the world.

Now, what it all means to interest rates, inflation, etc. is the tricky part.

Naturally, the doomer blabbersphere with a track record of near zero accuracy on calls will regale us with theories on why it means our imminent doom. Same as it ever was.

[Yoshua]

The Fed won't restart QE?

The Fed must have known that the global debt bubble would implode when they started to raise rates and started the QT. They knew that there was zero change that that debt would ever be possible to pay down or service.

They waited until something broke before they ended the QT and now they are just doing some damage control to protect the banks connected to the Fed?

Something is broken. Somewhere in the world.

[Armageddon]

FED is continuing massive capital injections into the financial sector to prevent another credit freeze

FED is lowering rates into an environment that is supposed to be booming (LOL)

More cuts are coming

QE is going on right now. The FED is buying bonds currently.

We are in uncharted waters and they are using desperate measures to keep this this afloat. The end of the fiat system is approaching

[Yoshua]

I did read an article by the Fed when they started to hike rates and talked about starting QT that the intention was to prevent the 10 year treasury yield to drop to zero.

For some time it did seem to work. But then the treasury yield dropped below the federal funds rate. At that point they started to cut rates and then ended the QT.

The Fed is really losing control?

[shortonoil]

Why not include a link for such quotes? Yes, I searched and found it, but why should everyone need to do that, select X stories to check, etc?

He probably didn't include a link because, outside of Sky Writing, it has been plastered all over the financial press all day. Crawl out of your cave and look up. The plane should be by any moment.

FED is continuing massive capital injections into the financial sector to prevent another credit freeze

Debt formation destroys liquidity, and the debt is massive, and growing at an astronomical rate. (Why, is another subject). Since the GFC the central banks have been injecting huge amounts of currency to compensate. Collateral is destroyed during debt formation, and collateral is required for loan initiation. Finding enough collateral to equal next year's debt growth will be difficult, if not impossible. Next year that growth will be $47 trillion.

The last three days have been a good indication of how critical liquidity in the credit markets has become. Even banks are having difficulty locating sufficient over night funds.
How are GE, or Mom%Pops Hamburg doing at securing funds? What happened to the banks over the last few days will happen to Moms%Pops in a few weeks. As the old saying goes, "shit rolls downhill". The pension funds are now so under capitalized that it is very unlikely they will be paying for the bale out of GFC II. Funds shortages were what happened during the last Great Depression. "Grapes of Wraith", was about no money!

[Armageddon]

NY Fed to pump $75 bn into money markets daily through Oct 10 news.yahoo.com/ny-fed-pump-75… via @Yahoo

Insane. Got gold and silver?

[EnergyUnlimited]

The end of the fiat system is approaching

If dollar is gone then yuan or SDR-s will become to be new reserve fiat.
Fiat is more resilient than you think.
They will lie their way through.
Fiddle here and there, launch few wars big enough to scare the sheeple, maybe even drop a nuke or two, then calm down everything and with big drama launch a heroic global program to "rebuild society"... while peddling a new fiat system.

[Armageddon]

The end of the fiat system is approaching

If dollar is gone then yuan or SDR-s will become to be new reserve fiat.
Fiat is more resilient than you think.
They will lie their way through.
Fiddle here and there, launch few wars big enough to scare the sheeple, maybe even drop a nuke or two, then calm down everything and with big drama launch a heroic global program to "rebuild society"... while peddling a new fiat system.

Very possible. They’ll also inflate then hyper inflate all the way until the end.

[The_Toecutter]

If dollar is gone then yuan or SDR-s will become to be new reserve fiat.
Fiat is more resilient than you think.
They will lie their way through.
Fiddle here and there, launch few wars big enough to scare the sheeple, maybe even drop a nuke or two, then calm down everything and with big drama launch a heroic global program to "rebuild society"... while peddling a new fiat system.

If anything, it seems as if the fiat paper currency is engineered for collapse so that an electronic and completely trackable system of currency can replace it. The governments of the world do not like anonymous transactions and have been implementing measures to make them difficult and/or impossible depending upon the size/type of transaction. An electronic currency would be the next logical step in the regime of ever escalating control over the individual, and as a bonus, one's access to their stored currency could then be shut off at the whim of law enforcement or some bureaucrat for any reason or no reason at all.

This stock market is all a giant rigged casino propped up with taxpayer dollars. The smart money has been pulling out for the last few months. No telling when it is going to correct, but I suspect it won't stay inflated to where it is much longer than the next few months and that its honest correction point will end up somewhere around 8,000-10,000, but considering all of the government and Federal Reserve manipulation inherent in the economic system, it's really anyone's guess what will happen and where it will end up. This "expansion" of fake growth could continue for years or decades. After all, Germany's stock market performed excellently prior to WWII while the masses were suffering with the consequences of hyperinflaton and literally starving at the same time they were being told how great their economy was. The rise of a demagogue(one of which correctly identified a major component of the problem plaguing his country, even if his solution was outlandishly evil) and the Night of the Long Knives came soon after...

[Ibon]

If anything, it seems as if the fiat paper currency is engineered for collapse so that an electronic and completely trackable system of currency can replace it. The governments of the world do not like anonymous transactions and have been implementing measures to make them difficult and/or impossible depending upon the size/type of transaction. An electronic currency would be the next logical step in the regime of ever escalating control over the individual, and as a bonus, one's access to their stored currency could then be shut off at the whim of law enforcement or some bureaucrat for any reason or no reason at all.

I have been predicting this for years. The informal economy is dead and with it goes the last bit of empowered freedom of individuals who are not beholden to corporations.

BUT you can only herd the people so far before there are breaking points and they start to refuse to play.

[Armageddon]

Goldman Sachs Has Just Issued An Ominous Warning About Stock Market Chaos In October


Doubt that. Trump will announce a partial China deal and roll back some of the tariffs if that happens. No way Trump will let the markets crash prior to the election.

[rockdoc123]

Goldman Sachs Has Just Issued An Ominous Warning About Stock Market Chaos In October

nice try Chicken Little....if someone actually bothers to read what Goldman Sachs said:

Stock volatility has been 25% higher in October on average ever since 1928, according to Goldman equity derivatives strategist John Marshall.

Big price swings have been seen in each major stock benchmark and sector over the past 30 years, with tech and health care being the most volatile groups, Goldman said.

“We believe high October volatility is more than just a coincidence. We believe it is a critical period for many investors and companies that manage performance to calendar year-end,” Marshall said.

in other words, it happens each and every year, nothing unusual, just part of the way the market normally fluctuates.

Meanwhile, in the real world, the S&P500 made it above 3000 earlier in the week before the Fed moves were digested and the S&P/TSX was at record highs near market close.

[The_Toecutter]

Doubt that. Trump will announce a partial China deal and roll back some of the tariffs if that happens. No way Trump will let the markets crash prior to the election.

I'm not so sure Trump can make as big of an impact on this as people think. He sure likes to take credit for the stock market's record highs, but I doubt that will remain true if it reverses.

This market can collapse completely independent of any China deal. Getting the timing of such a prediction correct is quite a tall order though, as the insiders are the only ones who really know what is going on. Endless taxpayer handouts via corporate welfare and robotic traders who make transactions in microseconds rule the roost there, and ordinary people are not allowed to take advantage of those things. At the Wall Street Casino, whether it's up or down, the house always wins.

[shortonoil]

If Argentina’s market could drop by half when Macri lost the primary, why can’t ours drop 20 or 30% if Warren is the candidate?

https://www.zerohedge.com/health/are-tr ... out-change

Of course, $331 trillion in crushing, economy paralyzing debt could have absolutely nothing to do with it? Trump knows what's coming (like everyone else who is still conscious enough to know that it is 2019) but he is going to try using a Warren gambit. Getting pretty desperate, aren't we? The White House just came out and admitted a 20 to 30% fall in the market is coming. Sorry Donald, it will be more like 50 to 60% and no one is going to believe that a slightly used Indian squaw had anything to do with it! When we have fallen into a permanent, never ending recession (once known as a depression) blame it on Alfred E. Neuman, and the Democrats. The fact that the world can no longer pump enough oil to pay its bills, and keep the economy running will never pass the lips of anyone at the WH. The US is energy self sufficient; they pinky swear by it!

Sounds good, now someone else tell one!

"Once upon a time in Never, Never Land there was a great big troll named Burt."

Don't laugh, it's true. At least if anyone can believe the Trump story; a Burt should be no problem at all.

By the way, this author is the last human being on the plant to believe the polls. We had to hear about a Hillary landslide until our ear drums burned out.