dChan
Anonymous ID: 997ae4 May 17, 2024, 5:12 p.m. No.20880603   🗄️.is 🔗kun   >>0615

US Banks Suffer $80BN Deposit Decline, Money Market Fund AUM Rise As Stocks Soar

 

For the fourth straight week, money market funds saw inflows (+$16.4BN), pushing back towards record highs above the $6 trillion level - the highest level in a month - after the seasonal tax-related dip. Retail investors have piled into money funds since the Fed began one of the most-aggressive tightening cycles in decades in 2022. On the institutional side, about $2 billion of cash left prime money-market funds, an indication investors are starting to shift their allocations ahead of the Securities and Exchange Commission’s latest set of regulations, which are slated to take effect later this year. a breakdown for the week to May 15, government funds - which invest primarily in securities such as Treasury bills, repurchase agreements and agency debt - saw assets rise to $4.89 trillion, a $17.2 billion increase.  Prime funds, which tend to invest in higher-risk assets such as commercial paper, saw assets rise to $1.03 trillion, a $1.89 billion increase.

 

The Fed's balance sheet continues to contract (by a sizable $49BN last week), now at its smallest since Jan 2021. This weekly drop was the largest in three months. On a side note, foreign central bank usage of the Fed’s reverse repurchase agreement facility facility rose to the highest level in a year, an indication policymakers around the world added to cash positions. As Bloomberg explains, the foreign reverse repo pool, like the domestic RRP, is a place where counterparties can park cash overnight with the Fed. Monetary authorities such as the Bank of Japan can keep a big chunk of funds there earning interest instead of in Treasury bills and other securities. And when they need to do something with those dollars, they can just withdraw it from the facility without ruffling markets.

Additionally, usage of The Fed's Bank Term Funding Program fell $3.1BN in the week through May 15, leaving a still-huge $109.6BN outstanding filling holes on bank balance sheets. Notice that this week's decline basically erases all of the arb-driven flows - leaving the bigger more problematic 'real' borrowing to come.

 

After a huge flip-flop in deposits over the last few weeks, seasonally-adjusted total deposits fell $17BN last week. But on a non-seasonally-adjusted basis, total deposits tumbled $70BN last week.

https://www.zerohedge.com/markets/us-banks-suffer-80bn-deposit-decline-money-market-fund-aum-rise-stocks-soar

Anonymous ID: 997ae4 May 17, 2024, 6:09 p.m. No.20880855   🗄️.is 🔗kun   >>0928 >>1184 >>1337

China unveils $41bn lending program to 'digest' unsold properties

 

(This is such a small amount it’s pissing against the wind and also undercuts existing holders because funds are applied to up to 60% of loan principal but when the entire economy is real estate based they have to do this in stages so expect moar…a lot moar cuz they are one step away from NINJA loans)

 

China's central bank on Friday said it will set up a new lending program to encourage local governments to "digest" excess housing supply, as the world's second-largest economy grapples with an accelerating decline in home prices. Under the new initiative, the People's Bank of China will provide "refinancing funds" worth 300 billion yuan ($41.5 billion) with low interest rates to 21 banking institutions. The banks can then issue loans to state-owned enterprises selected by city governments, which in turn will purchase completed but unsold commercial homes and convert them into subsidized housing for low- and middle-income citizens.

The PBOC's funds can be used to cover 60% of a loan's principal, up to a total credit size of 500 billion yuan. At a news conference on Friday, PBOC Deputy Gov. Tao Ling described the new scheme as a "government-led, market-oriented operation." City governments are responsible for selecting the state-owned enterprises that buy the homes, and the banks will need to make their own risk assessments when lending to them.

The announcement of the program came after an online meeting organized by the State Council, China's central government. Vice Premier He Lifeng said local governments can purchase "some" commercial housing inventory "at a reasonable price" and turn it into subsidized housing, according to state news agency Xinhua. They can also take back or acquire "idle stock of residential land" to ease the financial burden on developers, he said.

 

The move marks a significant push by the government to shore up a Chinese property sector that has soured amid a funding crunch at real estate developers, including former top player Country Garden, which is facing a wind-up petition in a Hong Kong court. But the authorities appear to be walking a fine line, as the purchase prices of the homes could end up exerting pressure on the fragile market.

 

According to the central bank's Tao, the interest rate on the refinancing funds is 1.75% per year, with a one-year term that can be renewed four times. The purchased homes must be within "certain sizes" and must be quickly rented out or sold to designated qualified groups. The state-owned enterprises selected cannot have affiliations with hidden local government debts or be local government financing platforms, Tao said.

Vice Premier He, for his part, also stressed that the country must fight against the "risk of unfinished commercial housing."

Separately, the central bank unveiled a string of policy measures for homebuyers, including scrapping a minimum interest rate on mortgages and easing down payment requirements.

https://asia.nikkei.com/Business/Markets/China-debt-crunch/China-unveils-41bn-lending-program-to-digest-unsold-properties