/biz/ - Business & Finance

[Anonymous No.16679484]

>US Fed printing 36 billion a day starting in September
>raises it to 50 billion a day in November
>recently raised to "at least" $76 billion a day in December
How long can these guys keep it up before the market crashes? And how does a Puerto Rican like me short it?

[Anonymous No.16679494]

until one of the banks fucks up and needs to be bailed out and they already blew their load inflating the stock market to get Trump re-elected

[Anonymous No.16679506]

>usd supply not defined by anything
>printing usd is meaningful
Choose one

[Anonymous No.16679513]

They've been under-subbed since they upped it 75bil a day. Only about 25-30 billion a day right now. Banks think they were just panicked and overestimating how much liquidity they needed, and are now taking only a conservative amount they think they will need. More then likely they will find it wasn't a false alarm and they actually need that much liquidity and start taking bigger chunks until we are oversubscribed again. It might happen all at once and panick starts again, might be a gradual drift upwards, who knows.

[Anonymous No.16679515]

>>16679506
It gets loaned to banks and they buy stocks with it no?

[Anonymous No.16679521]

>>16679515
No, usually they spend that cash on settlements and operating budget. What it means is there isn't a flash crash from banks or insurance companies panic selling their equities or bonds to cover a daily cash deficit. So its not used to pump stocks per say but to keep them from falling.

[Anonymous No.16679528]

>>16679521
Is the reason they're all mostly using the repo money is because it is less risky than lending/loaning from other institutions because they've worked out a lot of their debt is bad?

[Anonymous No.16679535]

>>16679521
It sounds like it's almost a way to encourage the banks to hold

[Anonymous No.16679545]

>>16679528
It could be. From a technical perspective it's just a "cash crunch", everybody needs to borrow cash and nobody is lending it. Personally I think that is exactly what is happening, some collateral or cashflow has broke down so the banks either expect the counterparty borrowing need to grow beyond their possible appetite, or they expect the collateral to have higher then expected default rates they cant possibly price in at near the current general rate.

[Anonymous No.16679554]

>>16679535
Yup you're right. Give them lots of cash for a paper thin 1bp overnight interest repayment so they don't have to dump the market.

[Anonymous No.16679576]

>>16679513
The boost was more about a bigger cushion if the trade wars got worse, what with Trump playing chicken with China. But that's easing, so the need isn't as great.
I;ve tried to educate the speds here that repos are what the fed did before QE, that it's not QE, and that it's potential loan amounts, not printing stacks and handing it out, it's loans, that get repaid. But they don't want to listen, so fuck 'em. They're all broke dick neets, anyway.

[Anonymous No.16679584]

>>16679484
The us markets won’t crash until there is some sort of indicator that the fed will play hands-off in a crisis. See 08, no one cared about the banking fuckery until Lehman was allowed to fail. Now that they have seen the consequences of allowing a bank to fail you can be assured they won’t let it happen again. Hence why markets seem bulletproof now, there is no risk priced in to us assets since bailout is a guarantee. Unironically this can go on for years, look out for slowly increasing inflation though in the early 2020s

[Anonymous No.16679596]

>>16679576
Doing gods work anon, understanding how to play the game is the first step to getting a spot at the table.

[Anonymous No.16679602]

>>16679584
Bailout guarantees will help ease the emotions of investors but will inevitably lead to hyperinflation

[Anonymous No.16679611]

>>16679602
it won't take years

[Anonymous No.16679615]

>>16679584
how to profit from inflation? buy real estate? gold and silver? btc?

[Anonymous No.16679629]

>>16679584
Repos aren't about market crashes. They're about interest rates, and the Fed is trying to keep them in a specific band over time. This has little to do with the stock market. This is banks lending to each other treasuries, at small percentage points, on very short time frames. The end of the year is a important time for them, their balance sheet determines their health for the next year, and they don't want a lot of debt or loans on them in December. All of the articles are saying interest in rep will spike in January - and that interest in them isn't a doom cloud of impending crisis, it's just how banks lend money to each other.
And, the trade wars have made banks leery of outstanding debt, as well.
It's interesting to watch the talking heads babble about it. Some say it's fine, others are saying the system is outdated and needs to be fixed. But none of it is any sign of impending crisis - that would be banks clawing for every repo dollar they can get their hands on, to stay liquid and meet obligations, and that's not happening.

[Anonymous No.16679645]

>>16679602
Eventually yes, but as it stands with the usd in such high demand we may not see hyperinflation manifested for years.
>>16679615
metals historically retain purchasing power, btc is too new to gauge but should act in a similar way. I wouldn’t worry too much about hyperinflation in the near term. If you’re a doomer just buy a bit of gold/btc as a hedge

[Anonymous No.16679673]

>>16679629
What do you think is the reason the Fed had to step in to provide liquidity, aren’t the banks supposed to lend between themselves?

[Anonymous No.16679689]

>>16679645
>high demand
every country is reducing it's UST holdings right now

[Anonymous No.16679694]

>>16679629
>But none of it is any sign of impending crisis

[Anonymous No.16679697]

>>16679673
Because the Fed has ALWAYS done that, chimp brain.

[Anonymous No.16679700]

>>16679694
Oh, noes, he played the MEME CARD, whatever shall I do?

[Anonymous No.16679720]

>>16679700
you could, no you should, definitely GO BACK

[Anonymous No.16679733]

>>16679697
Ok but something had to cause the overnight rates to spike to 10% or whatever, why did trust suddenly break down between banks?

[Anonymous No.16679883]

>>16679576
The fed balance sheet is increasing though. The repos are being repayed but they are injecting money somewhere. There is no hiding it.

[Anonymous No.16679967]

>>16679883
That's just because total repos have increased. It was 35 billion for 3 days at first, now its a total of around 500 billion. If the government is lying to you they will not leave any numbers for you to follow. At least not any primary data sets, there might be some peripheral leakage.

[Anonymous No.16679976]

>>16679484
> 76 billion usd a day???

https://www.treasury.gov/resource-center/faqs/Currency/Pages/edu_faq_currency_production.aspx

i thought it was half a billion at most

[Anonymous No.16680009]

>>16679733
Pretty sure that particular spike coincided with companies paying their tax bills and some other thing they had to pay down so their cash flows were low at the time.

[Anonymous No.16680025]

>>16679976
No. M1 is at 4 trillion. We create billions a day. What were talking about is limited operations where the federal reserve is increasing money supply in a limited way for day to day liquidty.

>>16680009
If that was true we wouldn't be needing continued operations for a full quarter

[Anonymous No.16680836]

>>16679484
any legit source for these numbers? I want to send it to my boomer parents

[Anonymous No.16680863]

>>16679976
That§s amount of printed paper in 2014. Satan knows how much they print digitally.

[Anonymous No.16680881]

>>16680025
> in a limited way
I'd sooner believe in shkreli becoming fed chairman, but I'll play the game. By what means is it limited?

[Anonymous No.16680933]

>>16679700
Go back you are unwanted in general.

[Anonymous No.16680974]

>>16679629
explain in a brianlet way, why are the banks lending to each other for extremely short (overnight) terms.