| Story Views | |
| Now: | |
| Last Hour: | |
| Last 24 Hours: | |
| Total: | |
S&P Above 1400 As Fed Conducts Second $600 Million Repo Following Nearly 4 Year Hiatus
The FED telegraphs to the banks its endless string of broken promises of market intervention is coming to an end.
Last week we explained why while endless promises of Fed intervention may be enough to confuse the market and force endless rounds of short covering as weak hands are flushed out of positions under threat (but never action) of central planning, banks are no longer in a position to delay indefinitely the moment they have all been waiting for: a $500+ billion reserve injection which will allow them to go hog wild in investing in risk assets or plug capital shortfalls (off the books of course), and otherwise continue their lives in a ZIRP environment which makes net interest margin existence impossible. We also showed that for the first time after nearly 4 years, the Fed conducted a regular (not reverse) repo last Friday. As we explained, regular repos are liquidity injecting, and while the Fed may promise these are merely test runs, everyone knows they are anything but, and are merely a telegraphing to the banks of what is in store. Today, the day after the last repo expired, we just got a new 3 day repo, only not for $210 million this time, but one for $600 million, including not only Treasury, but also Agency and MBS securities. The result: S&P above 1400 for the first time in months.
From the NY Fed:
And this is how the history of the Fed’s various repo operations has looked like in the past 4 years.
Sure enough, the S&P just went above 1400 like clockwork.
Source:Zero Hedge
Stay up to date with the latest news:
Twitter: https://twitter.com/#!/kr3at
Facebook: http://facebook.com/alexhiggins732
Live TV And Videos: Higgins TV
Website: The Alexander Higgins Blog
Headlines: Real-time News Headlines
Source: S&P Above 1400 As Fed Conducts Second $600 Million Repo Following Nearly 4 Year Hiatus ©
Copying or redistribution of this material requires that this license must remain intact with attribution to the content source.
Related Posts
2012-08-07 13:42:56
Source:
