>>20000908 pb mktFag: Japan office market faces foreign sell-off amid rising rates + GameStop bull trap and Federal Reserve history in election cycles
Money Market Funds See Massive Inflows As Fed's Bank Bailout Fund Holds At Record High
Money-market funds saw a massive $102BN inflow last week (the largest since the middle of the SVB crisis in March). The fifth straight week of inflows pushed total MM fund assets to a new record high of $5.84 TN.(and where do you think the money is going to come from to buy the coming US Debt issues next year?! because these MMFs have placed money at the NYFED RRF for 5 bp over Prime starting in 2021 and peaking at over $2T nightly in Dec ‘22-btw the OG Patriot Act allows Treasury to loot ANY account for your cash and replace it with their debt notes/bills)
A breakdown for the week to Nov. 29, government funds - which invest primarily in securities like Treasury bills, repurchase agreements and agency debt - saw assets rise to $4.77TN, a $71.5BN(see above)increase.
Prime funds, which tend to invest in higher-risk assets such as commercial paper, meanwhile, saw assets climb to $940BN, a $2.19BN increase.
With the vast bulk of that being into institutional funds (+$71BN), but the unbroken trend of flows into retail funds also continued. The resurgence in money-market fund inflows is diverging from bank deposits (which are gently rising on a seasonally-adjusted basis). Meanwhile, despite a small uptick into month-end, November saw a massive exodus of funds from The Fed's reverse repo facility, now at its lowest since July 2021-(see cap 3 from NYFED site)
Demand for the facility has been fading this year as the Treasury ramped up fresh bill issuance, offering an alternative for short-term investors.(but it’s all washed through the Primary Dealers and the daily NYFED Securities Lending Facility:$40.65B today). https://www.newyorkfed.org/markets/desk-operations/securities-lending
While reserve scarcity is not a serious worry yet, it;s coming if this pace continues. After stalling last week, The Fed's balance sheet contracted by $14.7BN last week (to its lowest since April 2021).(these are just maturing debt so if you owned them you could claim you “did QT”). QT also reaccelerated last week, with Securities Held declining by $12.3BN. Usage of The Fed's emergency funding facility for the banks remained at a record high of $114BN(and they will have to find a replacement for this Yuge hole in a little moar than 4 months and they will cause a “crisis” with PNC or Schwab and it’ll end up at shitibank or perhaps Goldman as they have the lowest amount of (AUM) Assets Under Mgmt compared to the size of derivatives they hold so even a few hundy million in depositor base will help them-think leverage-and don’t rule out Apple as they just “ended” its commercial bank arrangement with Goldman and also haz the experience nao (Goldman haz commercial bank license so giving one to Apple wouldn’t be much of a stretch nao because of previous arrangement).
Which should be no surprise, as we detailed earlier, unrealized losses for banks surged in Q3. And for now, banks appear to be pulling the cover over investors eyes that everything is going to be awesome (if rates keep falling).(this is the losses on hold to maturity bonds that haz improved since blowing up in late September/October)
Equity market cap continued to soar, having re-coupled with its years-long relationship with bank reserves at The Fed. The band-aid over bank losses may be holding for now… but what happens in March when The Fed pulls the plug on the 'temporary' bailout facility?(they won’t pay it back and the FED will have to start QE because they can’t have rates this high going into meat of election season-wouldn’t surprise me if they cut in January to get the ball rolling then enough distance for the QE in April)
https://www.zerohedge.com/markets/money-market-funds-see-massive-inflows-feds-bank-bailout-fund-holds-record-high
https://www.newyorkfed.org/markets/desk-operations/reverse-repo
Next week we’ll go into Foreign Bank Reverse Repo Usage as they are panic buying Treasuries in the same way but another report breaks it down via EuroDollar usage- they fugged too…you’ll see