Fed F**kery Turns Massive $33BN Bank Deposit Outflow Into $51BN Inflow
Bank stocks soared this week (along with everything else) despite another jump to a new record high for bank's usage of The Fed's emergency funding facility, and the massive deposit run the prior week.
Probably better not to show Bill Gross this chart…cap 1 since he said “buying regional banks now….bottom is in”-to paraphrase
So, what fun and games will The Fed do this week to 'adjust' the data so we don't panic about a sudden bank run? On a seasonally-adjusted basis, total bank deposits rose by $52.2BN… However, total bank deposits - unadjusted - fell by $22.3BN to its lowest since June… And just when we thought some sens of reality was kicking in, bank deposits and money-market fund assets diverge once again… Adjusting for foreign bank deposit flows, The Fed's magical 'adjustment stick' managed to turn $$33BN of outflows (NSA) into $51BN (SA) inflows… So, after the prior week's massive outflows, The Fed finds a way to stem the flow with some 'fuckery', leaving the delta between SA and NSA deposit losses since SVB now at $168BN For context -there has been $146BN in NSA outflows over the last two weeks vs $17BN in SA outflows.
On the other side of the ledger, it was a lending-gasm as Large banks saw loan volumes surge $24.6BN and Small banks loan volumes rose $5.4BN.That is the biggesat jump in lending volumes since mid-March
The key warning sign continues to trend ominously lower (Small Banks' reserve constraint), supported above the critical level by The Fed's emergency funds (for now)…(and those funds need to start reversing back on March 11th 2024 so I’d look for some major fuggery right around then-just in time for the FOMC to start reversing rate hikes in prime)
As the green line shows, without The Fed's help, the crisis is back (and large bank cash needs a home - like picking up a small bank from the FDIC).
https://www.zerohedge.com/markets/fed-fkery-turns-massive-33bn-bank-deposit-outflow-51bn-inflow