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Originally posted by redhatty
BEN: SOLD TO YOU!
*DRESDNER KLEINWORT TO DROP FROM RANKS OF FED'S PRIMARY DEALERS
*FEDERAL RESERVE'S PRIMARY DEALER NETWORK TO SHRINK TO 15 FIRMS
*FED'S PRIMARY DEALER NETWORK WILL BE SMALLEST ON RECORD
No link, off wires.
The Fed continued to buy the long end today, all on-the-run securities, nearly all 5 year. A massive $26 billion were submitted against $7.5 taken, strongly implying that Ben is (obviously) intentionally overpaying in his attempt to drive rates lower.
Unfortunately its not working, as the following chart shows on the TNX, with most of the damage coming right after the auction announcement:
(see link for chart that should be here)
Now granted, this is the 10 year and Ben bought 5s. But if the intent was to depress the curve generally, well, you tell me how well he did?
The IRX, the 13 week T-bill, didn't move to any material degree.
At this rate it will not be long before The Fed owns enough of the long end of the curve to effectively by the "whip hand", at which point external financing for the government is all in the short end.
And that, my friends, is when a simple decision to run down those short-term bills leads to the inability of the government to finance itself.
The government (and Fed) will thus by forced to dramatically raise offered coupon (interest rates) right into the maw of this economic and banking mess, exactly as happened during The Depression.
Get ready Ben - here it comes!
Originally posted by disgustedbyhumanity
UMM, if more were bid for then sold then that would mean that they were underpaying. If they were overpaying they would have gotten filled on all of their bids. The peiople posing as financial journalists these days make me sick.
Prediction - A breakdown of markets might start to occur as soon as April
Monday 19. January 2009
Markets are getting “out of control” - Three important news over the past weekend reveal a nearing showdown in the economy, supporting my predictions for a meltdown in markets around April.
Over the past week three important events occurred. This gives further support to my prediction on the nearing global economic meltdown. My analysis predict a meltdown in the bond and currency markets starting in April, early May 2009. This will be relatively shortly, after first volatile events will most likely take place in February. In case that I am correct on this and those events, like e.g. high volatility in the gold market with peaks over 1000$ a occur, then market failures in currency and bond markets are very likely to follow. Under these aspects, I predict these failures to start in April or early May.
(*Gold did climb*)
Here is a short summary of the news supporting this scenario:
Two further bank failures in the US, accompanied with nearing bankruptcy of California show that US financing problems are deepening. The bankruptcy of banks can not be stopped and rescue plans prove to be completely ineffective.
(*Banks have failed...Cali...'nuff said*)
Anglo Irish bank and the Irish government have frozen deposits above 20 million Euro, after the bank has been fully nationalized. This shows that not event governmental control brings in the required security and causes governments to access capital rights of people. It is very likely that this model of accessing capital rights will very fast widespread and implemented in all other EU countries. (We recall that the same happened with the Irish move to secure deposits). That means investors will become unable to reposition cash into long lasting assets.
(*Ireland did lose AAA Rating*)
The Bail out plan performed by the UK government proves to be useless. RBS reported extreme losses above 20 billion pound, the largest in UK history. A new plan to guarantee assets is important.
(*RBS has reported losses...G-20*)
A new (fourth) message reached markets this morning, Monday the 19th. It appears that certain asset markets are now picking up such a momentum, that the volumes which are traded outperform anything, seen ever before. The volume frightened some of the traders, who made statements about this on CNBC, revealing a link to most likely the Future markets.
In summary, my prediction is that:
We will see collapse of the markets starting in February and then entering a hot phase in April. Governments will have to increase their attempts to step-up and freeze asset classes and deposits, by accessing capital rights of people.
(*) are my remarks...scary??? hmmm
[edit on 4/2/2009 by Hx3_1963]
Creative Memories -50
Richmond Times-Dispatch -59
Hogan Hartson Law Firm -93
Berstein-Rein In Kansas City -10
Kohler Co. -455
Law Firm Mayer Brown -135
BF Goodrich Tuscaloosa -50
Taylor Made Glass Systems -78
US Postal Service -1,490
Suzuki USA -475
City of Worcester -308
Maysteel Closing Plant-89
107 Hospitals Layoff 50 or More
UTMB Galveston -3,800
NC State University -150
Klockner Pentaplast -38
Nippon Paper Mill Furloughs -75
Bombardier Aerospace -3,000
Misc. Solar Jobs -700 - Shouldn't solar jobs be important about now?
Buzz Media -15
City of St. Petersburg -10
Flint Michigan Schools -257
AIG Cuts At 38 Locations -580
i Crossing -30
Banc of America Securities -12
Originally posted by RetinoidReceptor
FDIC may force CITI and Wells Fargo to write down twice as much than they have already and sell assets!
Everything's fine nothing to see here