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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (76378)	12/21/2006 8:58:59 PM
From: jimmg	Read Replies (1) \| Respond to of 110194

<<The Fed has conducted 7 coupon passes for $7.266 since Thanksgiving. That's about 15% annualized, so there is nothing technical or normal about this operation at all. That's less than 1% of the total Fed balance sheet and federal reserve notes in existence. That's $42 per household in America. I don't think the Fed printing up $42 per household to support the Christmas shopping season sounds so outlandish. As far as the FCB's buying $38 billion worth of "old maid cards", you are focusing on only 1 side of the transaction. They could not buy that much debt if there wasn't a supply and demand for that much credit. The FCB's didn't force anyone to borrow money. They had US dollars on hand and they needed to do something with the money. They bought debt and probably some equity instruments with the dollars. These are dollars that Americans spent on imports. What else are the FCB's supposed to do with the money? I see no conspiracy.

To: russwinter who wrote (76378)	12/21/2006 11:24:52 PM
From: kris b	Respond to of 110194

"The Fed has conducted 7 coupon passes for $7.266 since Thanksgiving" Not too much to show for it. The stock market has been basically flat for over a month, so were inflation adjusted retail sales (2.4% nominal). No wonder they are in panic.

To: russwinter who wrote (76378)	12/22/2006 12:20:13 AM
From: bart13	Respond to of 110194

The Fed has conducted 7 coupon passes for $7.266 since Thanksgiving. That's about 15% annualized, so there is nothing technical or normal about this operation at all. Plus FCBs have purchased a record high $37.9 billion in US Old Maid Cards in the last three weeks. They are in a panic.Why is this necessary if the economy is in such great shape? True... and my (rather too obvious perhaps) working theory is that they are trying to cushion the upcoming blow and create a soft landing. Just taking M3 for example, which includes repos as you know, look at what they did in 2000-2001 and the similarity to now, plus take into account that there's a 12-24 month before M3 hits the broad economy.