Posts Tagged FED
346 Tons Of Gold On BIS Balance Sheet
Posted by Belisarius in Commodities, Markets on July 7, 2010
The big news point of the day is a newly discovered 346 tons of gold on Bank for International Settlements (BIS) balance sheet. The information can be found in a footnote in the BIS’s annual report. Page 163.
Included in “Gold bars held at central banks” is SDR8,160.1 million (346 tonnes) (2009: nil) of gold, which theBank held in connection with gold swap operations, underwhich the Bank exchanges currencies for physical gold.The Bank has an obligation to return the gold at the end ofthe contract.
Monthly Strategy – July 2010
Posted by Belisarius in Monthly Strategy on July 3, 2010
Almost unchanged from June.
Equities
Only extremely favorable economic data could change the negative trend established. This is highly unlikely. So I would say we will soon see S&P 500 at 875.
On a macro level, the stimulus is wearing off, politicians and central bankers are not ready to continue with loose fiscal an monetary policies, just the opposite, austerity is the game. For now.
Private demand is weak. Private investments also show no strength. Real-estate is burdened with unsustainable debt levels, still to high prices and weak demand. Without real-estate investment recovery, we cannot talk on sustainable and historically high economic growth rates.
FOMC Statement, June 23 2010
Posted by Belisarius in Markets on June 23, 2010
Negative tone added to the statement, making a rise in federal funds rate even more distant opportunity.
Economy improving, but the financial conditions less supportive because of developments abroad.
Information received since the Federal Open Market Committee met in April suggests that the economic recovery is proceeding and that the labor market is improving gradually. Household spending is increasing but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software has risen significantly; however, investment in nonresidential structures continues to be weak and employers remain reluctant to add to payrolls. Housing starts remain at a depressed level. Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad. Bank lending has continued to contract in recent months. Nonetheless, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be moderate for a time.
Monthly Strategy – May 2010
Posted by Belisarius in Monthly Strategy on May 5, 2010
Equities
With my 1,200 S&P 500 target reached I’ve moved to a kind of a ambiguous stance to the markets. Now I believe the equity markets are bound for a 10%+ down move at least.
My mid-term view remains unchanged – this is just a bear market rally; U.S. and E.U. economies will experience same patterns in both economy and markets as Japan in ‘90ies.
Recent pickup in consumer spending was due to decreased savings rate, not income growth, so I believe it is unsustainable mid term. The inventory cycle has ran its course, government stimulus is wearing off. A slower GDP growth is almost certain for the second half of the year.
FOMC Statement, April 28 2010
Posted by Belisarius in Markets on April 29, 2010
Nothing major. FED Press Release.
Economic activity picking up; Business spending improving; Construction spending not; Labor market beginning to improve.
Information received since the Federal Open Market Committee met in March suggests that economic activity has continued to strengthen and that the labor market is beginning to improve. Growth in household spending has picked up recently but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software has risen significantly; however, investment in nonresidential structures is declining and employers remain reluctant to add to payrolls. Housing starts have edged up but remain at a depressed level. While bank lending continues to contract, financial market conditions remain supportive of economic growth. Although the pace of economic recovery is likely to be moderate for a time, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability.
Monthly Strategy – April 2010
Posted by Belisarius in Monthly Strategy on April 1, 2010
Equities
Although I’m convinced that the economy is not pulling a V-shaped almost everywhere except in China and in their commodity based economy satellites I believe that in the short term the equity gains will continue. I have a 1200 S&P 500 target.
I have only a small exposure to the markets (via a June SPY 105/106 put ratio backspread) to keep interest for the markets. It’s performing bad.
My mid-term view remains unchanged – this is just a bear market rally; U.S. and E.U. economies will experience same patterns in both economy and markets as Japan in ‘90ies.
Bernanke Bluff
Posted by Belisarius in Markets on March 26, 2010
All the fuss yesterday was because of this:
When these tools are used to drain reserves from the banking system, they do so by replacing bank reserves with other liabilities; the asset side and the overall size of the Federal Reserve’s balance sheet remain unchanged. If necessary, as a means of applying monetary restraint, the Federal Reserve also has the option of redeeming or selling securities. The redemption or sale of securities would have the effect of reducing the size of the Federal Reserve’s balance sheet as well as further reducing the quantity of reserves in the banking system. Restoring the size and composition of the balance sheet to a more normal configuration is a longer-term objective of our policies. In any case, the sequencing of steps and the combination of tools that the Federal Reserve uses as it exits from its currently very accommodative policy stance will depend on economic and financial developments and on our best judgments about how to meet the Federal Reserve’s dual mandate of maximum employment and price stability.
“Exceptionally Low Federal Funds Rate For Extended Period” Encore
Posted by Belisarius in Markets on March 16, 2010
“Exceptionally Low Federal Funds Rate For Extended Period” still here; FED funds rate stays at 0%-0.25% in 9:1 vote with Kansas City Fed President Thomas Hoenig voting again against.
Economic activity picking up; high unemployment; business spending is recovering; housing relapse:
Monthly Strategy – March 2010
Posted by Belisarius in Monthly Strategy on March 1, 2010
Equities
In the macro arena we have leading indicators rolling over, and a stream of worse-than-expected data pieces on U.S. housing, U.S. employment, U.S. durable goods ordered and large move lower by consumer confidence.
Seems that the markets do not appreciate the data. Things that move the markets are only FED policy on rates, dollar strength and Greece debt problems. China credit tightening in forgotten for the time being (at least to the next announcement).
It’s All About The Free Money (In the Markets)
Posted by Belisarius in Markets on February 25, 2010
We have clear roll over of leading indicators in recent weeks and a deterioration in housing, jobless claims, durable goods orders today and bad consumer confidence reading.
Seems that the markets do not appreciate the data. Things that move the markets are only FED policy on rates, dollar strength and Greece debt problems. China credit tightening in forgotten for the time being (at least to the next announcement).
All dough I’m convinced that the economy is deteriorating almost everywhere except in China and in their commodity based economy satellites I have only a small exposure to the markets (via a June SPY 105/106 put ratio backspread) to keep me interest for the markets. I do not have a clear conviction short term.