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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: russwinter who wrote (77921)1/21/2007 1:52:08 AM
From: bart13  Read Replies (1) of 110194
 

Although the MBS component is high, I'm trying to figure out the relevance of this, so let me just guess? Does it mean the dealers are going extensively to the Fed funds and/or discount window to borrow for MBS purchases. Are the numbers presented here the collateral for these MBS transactions?


Just in case, I'm almost as much in the dark as you on the full picture. The whole GSDS area is something that no one of which I'm aware has ever brought up, and in that sense it's much like TIOs. But in this case its more that I have both done little analysis in the area, and also don't believe I'm as familiar as you & Lee and probably others with these types of flows.

GSDS stands for Government Securities Division Statistics and is part of the Fixed Income Clearing Corporation, and contains the activities of the 22 primary Fed dealers. The total of all 4 segments (Gov't securities, Agencies & GSEs, MBS & Corprate Bonds) has had a weekly range of $900-1,400 billion since 2001.
The MBS segment has run between $200-532 billion per week since 2001, and the $532 billion is this week's number and a record high since 2001.

I've simply been posting it because it's way off the beaten path, it marked a turning point in real estate stocks and other items over the years, and I've made (or not lost by getting out) a few dollars trading it much like I did with TIOs.

My best guess though is that there sure is action in Fed Funds via Fed credit (and likely other unknown sources too) to help fund the activities.



Here are all three GSDS charts from my site:





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