Anonymous ID: 2f001f Oct. 25, 2023, 2:34 p.m. No.19801451   🗄️.is 🔗kun   >>1521 >>1707 >>1745 >>1899 >>1913

Fed’s Financial Stability Report Says $20.3 Trillion Is Subject to a Run

 

(Which means THIS AMOUNT is roughly what any bailout would need to be passed by congress Protip: crqno chance in hell….completely dwarfing the ‘08-original public amount of $750b-and THAT was used solely to recapitalize the insolvent banking system….they dint fix a damn thing and never planned to…why do that if,for example, JP Moran can add or subtract TRILLIONS in derivatives from Q to Q cap 2 is the latest FDIC losses for hold to maturity (US Debt)…..it’s higher by now)

 

Last Friday, the Federal Reserve published its Financial Stability Report, which takes a detailed look at U.S. financial stability through the second quarter of this year. Although the Fed does its best to put a rosy glow on the outlook, it’s not a pretty picture. We found the most disturbing sentence in the report to be the following:and complete BULLSHIT….what did you think they were gonna say

“Overall, estimated runnable money-like financial liabilities increased 3.4 percent to $20.3 trillion (75 percent of nominal GDP) over the past year.”

Given that a handful of banks this past spring, with combined liabilities of less than $1 trillion, caused a full blown banking panic and bank runs, the Fed’s figure of $20.3 trillion of “runnable” money is not a comforting thought. The Fed elaborates as follows: follows:

“The banking industry maintained a high level of liquidity overall, but some banks continued to face funding pressures; meanwhile, structural vulnerabilities persisted in other sectors engaged in liquidity transformation.

“The banking industry overall maintained a high level of liquidity since the May report. Funding risks for most banks remained low, and large banks that are subject to the liquidity coverage ratio (LCR) continued to maintain ample levels of HQLA [High Quality Liquid Assets] given the risk of their funding structures. That said, banks that came under stress and experienced large deposit outflows in March continued to face funding pressure. Since March, volatility has abated and deposit outflows have largely stabilized—owing, in part, to actions by the Department of the Treasury, the Federal Reserve, and the Federal Deposit Insurance Corporation—but these banks nonetheless continued to face challenges navigating changes in depositor behavior, higher funding costs, and reduced market values for investment securities.

“Prime MMFs [Money Market Funds] and other cash-investment vehicles remained vulnerable to runs and, hence, contributed to the fragility of short-term funding marketssee the run up and now run down of the NY FED Reverse Repo FacilityIn addition, some cash-management vehicles, including retail prime MMFs, government MMFs, and short-term investment funds, maintained stable net asset values (NAVs) that make them susceptible to sharp increases in interest rates.(You can read the rest of this drivel at article link-edit for space)

 

The mention of life insurers with “nontraditional liabilities” and “illiquid and risky assets on their balance sheets” is a particularly sensitive subject for the Fed, which is supposed to be supervising the global systemically important banks (GSIBs) to make sure they don’t spread their contagion through the U.S. financial system in a replay of 2008. On September 16, 2008, one day after Lehman Brothers made its bankruptcy filing, the U.S. government had to nationalize American International Group (AIG), one of the largest life insurers in the world.

AIG received a taxpayer backstop of $185 billion but the bailout of AIG was in reality a backdoor bailout of the global banks on Wall Street who had used AIG as a counterparty on their casino-like Credit Default Swaps and for securities loans – neither of which AIG could make good on. (Something that the Fed’s bank examiners apparently missed.)

It was eventually revealed that major Wall Street banks, foreign banks and hedge funds received more than half of AIG’s bailout money ($93.2 billion). Public pressure eventually forced AIG to release a chart of these payments.

Since 2008, (and I’d argue it started in 2002 with the coming Iraq war #2) the Fed’s approach to both supervision of the mega banks and financial stability is to have no restraints on the amount of money it can create electronically to bail out the bad boys on Wall Street in an effort to cover up its own incompetence as a bank supervisor.

 

https://wallstreetonparade.com/2023/10/feds-financial-stability-report-says-20-3-trillion-is-subject-to-a-run/

 

https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm

 

https://www.fdic.gov/analysis/quarterly-banking-profile/qbp/2023jun/chart7.xlsx

Anonymous ID: 2f001f Oct. 25, 2023, 2:48 p.m. No.19801521   🗄️.is 🔗kun   >>1745 >>1899 >>1913

>>19801451

Yields Jump After Gruesome 5Y Auction Prices With Biggest Tail In 15 Months

 

(Primary Dealers have to buy here but it’s getting harder to offload this crap after they buy it-see below for dealer take down….QE coming next year in early spring)

 

Well, the treasury market respite from the "Bills" closing out their shorts was, as expected, quite short lived and moments ago the pricing of an ugly 5Y auction reminded just how much more pain lies in store for the US bond market.

The sale of $52BN in 5Y notes priced at a high yield of 4.899%, more than 20bps above last month's 4.671%, the highest yield since June 2007, and also tailing the 4.880% When Issued by a whopping 1.9bps, which was the biggest tail since last September and the 4th biggest tail in the past decade.

The bid to cover of 2.36 was also rather ugly, and not only was it below last month's 2.52 and the six-auction average of 2.55, it was (also) the worst since last September. The internals were even uglier with Indirects sliding by almost 10bps to 61.5% from 71.2%, the lowest since - you guessed it - last September, and below the recent average of 68.9%. And with Directs awarded 19.1%, or roughly in line with the recent average,Dealers were left holding 19.4%, the most since, drumroll, last September.The auction was so ugly, the bond market was rocked wider with the 10Y rising as high as 4.95%, and fast approaching the key level of 5.00% where yields halted their retreat earlier this week.

 

https://www.zerohedge.com/markets/yields-jump-after-gruesome-5y-auction-prices-biggest-tail-15-months

Anonymous ID: 2f001f Oct. 25, 2023, 3:53 p.m. No.19801860   🗄️.is 🔗kun

>>19801803

Umm no

This is just the latest installment of several moar to come. Gonna take avg Hebrew to figure this out and understand what’s been done to them and everyone else

Long road still