Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: bart13 who wrote (77929)	1/21/2007 10:44:14 AM
From: russwinter	Read Replies (1) \| Respond to of 110194

Yes, the terms are real arcane, but here's what I'd guess (as opposed to know) that this all means. This is dealer activity at the discount window, and the data on MBS suggests those securities are being pledged as collateral. I think there is also a program from non-dealers too, and I was wondering if you've spotted another set of numbers that looks similar. frbdiscountwindow.org The reason this number is getting higher relates to the rather poor deposit growth banks are experiencing. They need to go to this discount rate source for higher cost borrowing. It's really supposed to be just emergency stop gap borrowing. Another source of this type of higher cost borrowing is the Home Loan Bank mentioned by Contrary Investor this week. The final grains of sand being kicked in the collective faces of the banks? Lack of core deposit growth. That means to increase lending many are borrowing from the Home Loan Bank, other secondary sources, etc., further pressuring net interest margins. What may also be happening is that debt service to foreigners has reached a point where money in the US keeps getting sucked abroad, with less of it available for internal deposit growth. If so it's ominous. Meanwhile most of the lending growth still underway has been in large measure speculative. Even there some of the last stage activity such as commercial and industrial lending is slowing dramatically. 11/01/2006 1187.3 11/08/2006 1180.5 11/15/2006 1176.9 11/22/2006 1181.0 11/29/2006 1180.6 12/06/2006 1188.6 12/13/2006 1181.4 12/20/2006 1198.2 12/27/2006 1187.5 01/03/2007 1192.4 01/10/2007 1191.2 The final straw are stories like this one coming out. I've been asking about Florida for months, and I guess this can only be delayed and hidden for so long. This should get to be a torret henceforward. biz.yahoo.com