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Non-Tech : Money Supply & The Federal Reserve -- Ignore unavailable to you. Want to Upgrade?

To: UnBelievable who wrote (15)	8/9/2002 9:49:13 AM
From: Cush	Read Replies (2) \| Respond to of 1379

Thanks UnBelievable. If you have the time and the data would you post (or PM me) the Daily numbers for the past twenty or thirty days. I was thinking I might develop a StockChart with that data laid on top of a chart of Gold vs US$ or Gold vs Dow. Just wondering if the correlation will be apparent, and possibly useful in understanding the impact they're having, and perhaps predicting the impact of future intervention. Cush

To: UnBelievable who wrote (15)	8/10/2002 2:39:50 AM
From: ahhaha	Read Replies (3) \| Respond to of 1379

I get your handle. For those who may not have read any of my prior posts my basic perspective is that the only thing holding this market up is the Fed's continual injection of daily liquidity. FED isn't injecting "liquidity" daily. RPs aren't an injection. They come back. The only "injection" is found in the permanent additions. Recently permanent has been pared back from the fairly heavy rate FED has maintained for the last 1 1/2 years, but this hasn't had any policy effect because the public's preference for currency over demand deposits can fully explain the permanent rate of creation. Until either a significant drop in the value of the dollar or domestic inflation that cannot be explained away, causes them to stop, they will continue this type of activity. RP transactions have no consequence to either of these factors. The purpose of the RPs is simply to maintain target fed funds rate. FED's RP actions have no effect because in this period the run-off in C&I loans and commersh continues. Thus it doesn't really matter what the fed funds rate is, and so RPs are superfluous. This wouldn't be the case though if demand for loanable funds forced the market rate above target and FED defended their target using RPs. It has the effect of multiplying the economic effect of permanent additions at a rate proportional to the RP free float, the quantity of RPs instantaneously outstanding. BTW - many people do not know that the Fed is owned by the major banks - among the largest shareholders are JPM and C. The FED is not owned by commercial banks. The FED was chartered by the US government and is manager of the US Treasury's account. The above banks like most in the US and abroad are members in the federal reserve system. This only means they have the ability to borrow from their local federal reserve banks. Membership also means they must comply with reserve requirements. There is no capital stock or other means of ownership by which member banks could exercise some form of control over FED.

To: UnBelievable who wrote (15)	8/10/2002 2:20:26 PM
From: Mike Chupp	Read Replies (2) \| Respond to of 1379

The FRB system was created by an act of congress. As an ex employee of the NYFRB, I had the pleasure of working with some bright and sincere people. It does not operate like government and the civil service system. It is very like working for a corporation. Managers hire and terminate people by going though the HR department. A lot of monetary data is collected from banks. Some of this data is reported incorrectly and later revised. At the operating level FRB is a quality organization. Don't have the foggiest about what goes on in Washington. When I was employed there I had the pleasure of seeing then chairman Paul Volker and Alan Greenspan standing side by side. Volker was a nice looking man (about seven feet tall). Greenspan was plain ugly (about five feet tall). What a contrast!

To: UnBelievable who wrote (15)	8/11/2002 1:44:45 AM
From: rr_burns	Respond to of 1379

I was reading over the full page G&M advert by "torys" about the SEC reporting changes coming out and the corresponding lead article in the same biz section on fundamental accounting changes for SPE's (special purpose enterprises of the enron "off the main books" debt flavour). My, somewhat tongue in cheek, question for this forum: Does the federal reserve qualify as a special purpose enterprise in the sense meant? for JPM et.al.? Or perhaps, for the Fed, JPM is an spe? Here is a link to the spe article globeandmail.com The torys "ad" as a whitepaper is here: torys.com ..rr