Hum a quick look at the major indices and it seems like carnage
Gold and silver down by a lot vix up indices in red.will check with more details in a couple of hours
If you are actively investing or trading, then it is very much 'your' (our) problem. If you do not understand accurately, or choose to ignore what and how the Fed. is organised and its purpose, you will fundamentally misunderstand how the world's financial markets operate.
There is an old adage: 'Don't fight the Fed.'. Never was a truer word spoken. You may not like it. You may oppose it on ethical, legal and economic grounds, but don't make the mistake of betting against it.
2008/2009 was a far worse test of the Fed's. power than COVID. COVID is a nothing by comparison. The Fed. managed, from behind the 8-ball, to step in and literally save the world's financial system within 5 hrs over collapse: nothing was clearing through the banking system. I traded this (or rather watched) as trades were unable to clear for about 4hrs, while the system was literally collapsing before you.
My advice: long path, study the Fed. Short path: trade in the same direction as the Fed.
jog on
duc
The problem with sweeping generalisations, as already stated, is that they are generally inaccurate, misleading or simply incorrect.
So the Federal Reserve:
View attachment 107367
These are the member Banks.
View attachment 107368
What they are (supposed) to do:
View attachment 107369
How they execute FOMC:
View attachment 107370
What it constitutes:
View attachment 107371
Through the Primary Dealers:
View attachment 107372
jog on
duc
The legal representative of the FED is on the record before Congress openly stating that the FED purchase assets through the commercial banks.
Make of that, what you will; if I have time to find the testimony for you, I will.
Yes, I agree as far as trading and investing accordingly.
I am saying that the problems aren't our problem to deal with.
It doesn't strike you as strange that the Federal Reserve Bank need commercial banks to purchase assets on the various exchanges?Clearly you haven't bothered to read what I posted. If you had you would know not to bother wasting your time.
jog on
duc
1. It doesn't strike you as strange that the Federal Reserve Bank need commercial banks to purchase assets on the various exchanges?
2. Clearly you are lacking attention to detail and analytical depth if this hasn't crossed your mind.
3. You think the commercial banks will not front run the FED? Dream on Duc
1. I see that you still haven't bothered to read my earlier post. So here is the relevant part:
View attachment 107404
So my answer to [1] is: no it does not strike me as strange as that is how the process is designed.
2. Well not only did it cross my mind, but I actually (back in the day) researched it. Something that you clearly haven't bothered to do.
3. Really? To what purpose?
jog on
duc
1. I see that you still haven't bothered to read my earlier post. So here is the relevant part:
View attachment 107404
So my answer to [1] is: no it does not strike me as strange as that is how the process is designed.
2. Well not only did it cross my mind, but I actually (back in the day) researched it. Something that you clearly haven't bothered to do.
3. Really? To what purpose?
jog on
duc
This is my point: why does the Federal Reserve Bank need to go through dealers, when they can go directly into the market themselves to buy and sell what they like.
So my understanding is the FED tells bank X (primary dealer) to buy asset X for the FED. Bank X goes into the market to buy asset X for the FED.
Just like how you tell your broker to buy your shares.
The Fed. Bank of New York, has a trading desk that directly trades with the Primary Dealers (Money Centre Banks). The purpose is to control the Fed Funds Rate, from which the curve takes its information, through Bank Reserves, which the Banks use in the Repo market for overnight money and settlement. The little guys (Retail banks) come to the Money Centre Banks (Commercial) for overnight Repos.
If you look at the list of Primary Dealers, you will see they are all major money centre banks. The Fed is not going to deal with your local branch of ANZ or whatever.
Sitting at the top of the tree is the Fed.
jog on
duc
Steady-on son.
1. That's for overnight money markets.
2. What about mortgage backed securities and corporate bonds.
1. Incorrect. It is for the Fed Funds rate: which is in addition, the Repo market.
2. GSE securities are/can also be purchased from the Primary Dealers. Now Corporate Bonds are where the Fed. went rogue and outside its remit. The Corporate Bonds were largely purchased directly via the LQD ETF.
jog on
duc
Now what about treasury notes and treasury bonds. Does the FED buy these directly from treasury or do they go through the primary dealers?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?