by What the hell is going on.#reverserepo data from @aRishisays feed.ht @DiMartinoBooth @tyillc @TheBondFreak @bondstrategist @MotherCabriniNY @homerixy32 @kimgits1 @VlanciPictures pic.twitter.com/DMVvUaocxm— Dave Loves Carnage (@dapstats) May 26, 2021 This is funny you have all these people (finally, we’ve been covering this here for years) talking about this but NOOOOOOBODY is asking why the Fed is doing this in the first place... it’s as if all these people think the reserve balance accounting abstractions are real and they are flying in from Mars or something...WHERE is the technical criticism of this policy? (Other than here...). Where??? Where is it???DOES... NOT... EXIST... ANYWHERE... ELSE...You have the Fed creating/issuing 0B per month of reserve balances for over a year to
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What the hell is going on.#reverserepo data from @aRishisays feed.
ht @DiMartinoBooth @tyillc @TheBondFreak @bondstrategist @MotherCabriniNY @homerixy32 @kimgits1 @VlanciPictures pic.twitter.com/DMVvUaocxm
— Dave Loves Carnage (@dapstats) May 26, 2021
This is funny you have all these people (finally, we’ve been covering this here for years) talking about this but NOOOOOOBODY is asking why the Fed is doing this in the first place... it’s as if all these people think the reserve balance accounting abstractions are real and they are flying in from Mars or something...
WHERE is the technical criticism of this policy? (Other than here...). Where??? Where is it???
DOES... NOT... EXIST... ANYWHERE... ELSE...
You have the Fed creating/issuing $120B per month of reserve balances for over a year to the point where they have eliminated the ability of their DEPOSITORIES (yo key syllable here being ‘DEPOSIT’) to accept deposits. Why? Why would anyone want to do that?
Then having just created/issued them in the system, they now have to take them out or redeem them... having just put them in.... why? Why not just don’t put them in in the first place?
All this is doing is creating another LARGE account of reserve balances in the system that can for whatever reason (rates are reduced further and MMMFs close to new investors?) for whatever reason doesn’t matter...these balances, as long as they exist, can come rushing back in to the depositories and cause another crash in risk asset prices like they always do... when the FRA charges them with “stable prices”...
It’s a BAD POLICY ... and dangerous ... that directly conflicts with other regulatory constructs... its impairing the ability of their own depositories to perform their function within the system... and btw it’s Monetarist at core ... with the people there thinking these regulatory accounting abstractions are real and they have to “be there” so depositories can lend them out.. if not then what is the reason? What?
All the people there need to be CANNED...