Magox Posted August 2, 2017 Posted August 2, 2017 I can't see a problem of unwinding their treasury holdings, simply hold until they mature. The MBS will be a little trickier, but, having said that, there really is no economic reason for the Fed to unwind its asset holdings. I don't know, so many conflicting headwinds, tailwinds, disruptions and dislocations it's difficult to say.
GG Posted August 2, 2017 Author Posted August 2, 2017 I can't see a problem of unwinding their treasury holdings, simply hold until they mature. The MBS will be a little trickier, but, having said that, there really is no economic reason for the Fed to unwind its asset holdings. Who's going to provide the capital to take out the maturing bonds?
Tiberius Posted August 2, 2017 Posted August 2, 2017 Trump in a WSJ interview So I deal with foreign countries, and despite what you may read, I have unbelievable relationships with all of the foreign leaders. They like me. I like them. You know, it’s amazing. So I’ll call, like, major — major countries, and I’ll be dealing with the prime minister or the president. And I’ll say, how are you doing? Oh, don’t know, don’t know, not well, Mr. President, not well. I said, well, what’s the problem? Oh, GDP 9 percent, not well. And I’m saying to myself, here we are at like 1 percent, dying, and they’re at 9 percent and they’re unhappy. So, you know, and these are like countries, you know, fairly large, like 300 million people. You know, a lot of people say — they say, well, but the United States is large. And then you call places like Malaysia, Indonesia, and you say, you know, how many people do you have? And it’s pretty amazing how many people they have. So China’s going to be at 7 [percent] or 8 percent, and they have a billion-five, right? So we should do really well. But in order to do that — you know, it’s tax reform, but it’s a big tax cut. But it’s simplification, it’s reform, and it’s a big tax cut, 15– http://www.politico.com/story/2017/08/01/trump-wall-street-journal-interview-full-transcript-241214?lo=ap_d1
TPS Posted August 2, 2017 Posted August 2, 2017 Who's going to provide the capital to take out the maturing bonds?for treasury bonds, its account at the Fed decreases by an amount equal the bond maturing. The treasury most likely will rollover the debt at the next auction, and their auctions are always filled. The mbs are being paid down over time already.
GG Posted August 2, 2017 Author Posted August 2, 2017 for treasury bonds, its account at the Fed decreases by an amount equal the bond maturing. The treasury most likely will rollover the debt at the next auction, and their auctions are always filled. The mbs are being paid down over time already. Auctions are full because there's a big captive buyer ... and never mind the effect of the exit of the biggest buyer of MBS. Who'd want to be around when that music stops?
Magox Posted August 2, 2017 Posted August 2, 2017 Auctions are full because there's a big captive buyer ... and never mind the effect of the exit of the biggest buyer of MBS. Who'd want to be around when that music stops? That's true, but do you really see the music ending anytime soon? There is no better tune in the foreseeable future than that of the US tune.
TPS Posted August 2, 2017 Posted August 2, 2017 Auctions are full because there's a big captive buyer ... and never mind the effect of the exit of the biggest buyer of MBS. Who'd want to be around when that music stops? The Fed's BS has been pretty stable for a few years now--they also haven't been very active in mbs for the past 3 years. Auctions are full because there is always demand for the largest, safest and most liquid asset in the world. Who is "a big captive buyer?"
SlimShady'sSpaceForce Posted August 2, 2017 Posted August 2, 2017 So the current hapless administration deserves criticism for following the same monetary policy as the previous administrations? What opinion of the previous administration? All I said was that 6 months isn't enough time to give credit or blame. I don't claim to be an expert it's jmo
TPS Posted August 2, 2017 Posted August 2, 2017 All I said was that 6 months isn't enough time to give credit or blame. I don't claim to be an expert it's jmo Directed at me, since I called them hapless. I'm referring to their inability to get anything of note passed. The republicans have majorities in both houses, but this administration can't seem to take advantage of it. His honeymoon is over...
GG Posted August 2, 2017 Author Posted August 2, 2017 The Fed's BS has been pretty stable for a few years now--they also haven't been very active in mbs for the past 3 years. Auctions are full because there is always demand for the largest, safest and most liquid asset in the world. Who is "a big captive buyer?" Don't be cute. You know who the active buyer has been. The funny (not really) part is there's one side of the Fed that's confounded by the amount of liquidity in the capital markets and don't understand why banks continue to load up on more risk.
TPS Posted August 2, 2017 Posted August 2, 2017 Don't be cute. You know who the active buyer has been. The funny (not really) part is there's one side of the Fed that's confounded by the amount of liquidity in the capital markets and don't understand why banks continue to load up on more risk. if you are referring to the Fed, they can't participate in auctions because that would be directly financing the treasury, which they're not allowed to do; they have to buy in the secondary markets. As I've said before, It's the 21 primary dealers who are required to make the market in new issues when needed.
GG Posted August 2, 2017 Author Posted August 2, 2017 if you are referring to the Fed, they can't participate in auctions because that would be directly financing the treasury, which they're not allowed to do; they have to buy in the secondary markets. As I've said before, It's the 21 primary dealers who are required to make the market in new issues when needed. And where is their liquidity coming from? The balance sheet has to unwind, and it won't be pretty.
TPS Posted August 2, 2017 Posted August 2, 2017 And where is their liquidity coming from? The balance sheet has to unwind, and it won't be pretty. as I said, there's no economic reason it has to unwind. No worries.Banks have over $2 trillion in excess reserves; liquidity is not a problem.
Nanker Posted August 4, 2017 Posted August 4, 2017 I can't see a problem of unwinding their treasury holdings, simply hold until they mature. The MBS will be a little trickier, but, having said that, there really is no economic reason for the Fed to unwind its asset holdings. Creating more chaos perhaps? Assisting the coup? Preserving their own power? Directed at me, since I called them hapless. I'm referring to their inability to get anything of note passed. The republicans have majorities in both houses, but this administration can't seem to take advantage of it. His honeymoon is over... Healthcare insurance reform has them in a stranglehold. Their failure to produce a viable path to unraveling the ACA abortion has them doomed. Without savings from that Jonah, they can't get real tax reductions in place. Forget about tax reform. That will take a bipartisan effort and the chances of that are smaller than The Bills winning the Super Bowl in 2018.
Tiberius Posted September 12, 2017 Posted September 12, 2017 For all the crying, moaning and complaining about the economy under Obama: https://www.washingtonpost.com/news/wonk/wp/2017/09/12/middle-class-income-hit-highest-level-on-record-in-2016-census-bureau-reports/?utm_term=.18ba7e0681b4 America's middle class had its highest-earning year ever in 2016, the U.S. Census Bureau reported Tuesday. Median household income in America was $59,039 last year, surpassing the previous high of $58,655 set in 1999, the Census Bureau said. The figure is adjusted for inflation and is one of the most closely watched indicators of how the middle class is faring financially, as the Census surveys nearly 100,000 homes. The Census said the uptick in earnings occurred because so many people found full-time jobs — or better-paying jobs — last year. America's poverty rate also fell to 12.7 percent, the lowest since 2007, the year before the financial crisis hit. The percent of Americans without health insurance for the entire year also dropped in 2016 to just 8.8 percent, largely thanks to expanding coverage under the Affordable Care Act.
row_33 Posted September 12, 2017 Posted September 12, 2017 Obama was a calm time (fortunately) with a decent man at the helm, nothing useful or important happened to people who already had their act together.
Tiberius Posted September 12, 2017 Posted September 12, 2017 Obama was a calm time (fortunately) with a decent man at the helm, nothing useful or important happened to people who already had their act together. Calm time? Recession?
Tiberius Posted October 16, 2017 Posted October 16, 2017 It takes time to screw things up, just like it took so much time under Obama to fix things, but its happening http://www.politico.com/story/2017/10/15/japan-trump-trade-243767 Meanwhile, there is growing evidence that the failure of the TPP is taking a sharp toll on rural America. In August, U.S. sales of pork to Japan dropped by 9 percent, a serious blow to farmers who had been preparing for a big increase in sales because of lower tariffs in the TPP. Instead, other countries that export meats, grains and fruits have seized on their advantage over American growers and producers in the wake of the U.S. pullout from the TPP. And a new Reuters poll shows Trump’s favorability in rural America — once a great stronghold — dropped from 55 percent last winter to 47 percent in September. The poll also showed a plunge in support for Trump’s trade agenda among rural voters.
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