Comments on: Score One Success for the Federal Reserve http://alephblog.com/2008/01/16/score-one-success-for-the-federal-reserve/ Helping Institutions and Ordinary People Invest Better by Focusing on Risk Control Fri, 25 May 2012 17:02:54 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: David Merkelhttp://alephblog.com/2008/01/16/score-one-success-for-the-federal-reserve/comment-page-1/#comment-16534 David Merkel Thu, 17 Jan 2008 15:09:58 +0000 http://alephblog.com/2008/01/16/score-one-success-for-the-federal-reserve/#comment-16534 That's true, but the FHLBs fund cheaper than those advance rates, at least for now. That’s true, but the FHLBs fund cheaper than those advance rates, at least for now.

]]> By: Slumlordhttp://alephblog.com/2008/01/16/score-one-success-for-the-federal-reserve/comment-page-1/#comment-16532 Slumlord Thu, 17 Jan 2008 07:29:49 +0000 http://alephblog.com/2008/01/16/score-one-success-for-the-federal-reserve/#comment-16532 Hi David, Great site. <i>though the FHLBs typically charge fair rates on their advances. They aren’t non-profits.</i> Check out FHLB Boston's rates. Some of the rates are below Fed funds rate. http://www.fhlbboston.com/rates/advances/index.jsp Hi David, Great site.

though the FHLBs typically charge fair rates on their advances. They aren’t non-profits.

Check out FHLB Boston’s rates. Some of the rates are below Fed funds rate.

http://www.fhlbboston.com/rates/advances/index.jsp

]]> By: David Merkelhttp://alephblog.com/2008/01/16/score-one-success-for-the-federal-reserve/comment-page-1/#comment-16530 David Merkel Thu, 17 Jan 2008 04:23:52 +0000 http://alephblog.com/2008/01/16/score-one-success-for-the-federal-reserve/#comment-16530 The Federal Reserve has also gone easier on certain leverage requirements, which is the main reason why the monetary aggregates have grown faster than the monetary base. The Federal Reserve has also gone easier on certain leverage requirements, which is the main reason why the monetary aggregates have grown faster than the monetary base.

]]> By: donhttp://alephblog.com/2008/01/16/score-one-success-for-the-federal-reserve/comment-page-1/#comment-16526 don Thu, 17 Jan 2008 02:10:56 +0000 http://alephblog.com/2008/01/16/score-one-success-for-the-federal-reserve/#comment-16526 Being that the Fed hasn't injected much of any net liquidity as of the last few months - in that TOMO operations have, when combined with the TAF, come out around even - and being that TOMO stop out rates haven't been at 4.25 much of the time recently, being often below 4.25, can we still say that there exists a risk of inflation as you assert? Granted, TAF has allowed for more flexible collateral. Perhaps this is the primary effect. Being that the Fed hasn’t injected much of any net liquidity as of the last few months – in that TOMO operations have, when combined with the TAF, come out around even – and being that TOMO stop out rates haven’t been at 4.25 much of the time recently, being often below 4.25, can we still say that there exists a risk of inflation as you assert? Granted, TAF has allowed for more flexible collateral. Perhaps this is the primary effect.

]]> By: David Merkelhttp://alephblog.com/2008/01/16/score-one-success-for-the-federal-reserve/comment-page-1/#comment-16522 David Merkel Wed, 16 Jan 2008 20:57:29 +0000 http://alephblog.com/2008/01/16/score-one-success-for-the-federal-reserve/#comment-16522 I keep forgetting about the FHLBs... that's a good point, though the FHLBs typically charge fair rates on their advances. They aren't non-profits. I keep forgetting about the FHLBs… that’s a good point, though the FHLBs typically charge fair rates on their advances. They aren’t non-profits.

]]> By: Slumlordhttp://alephblog.com/2008/01/16/score-one-success-for-the-federal-reserve/comment-page-1/#comment-16521 Slumlord Wed, 16 Jan 2008 20:33:23 +0000 http://alephblog.com/2008/01/16/score-one-success-for-the-federal-reserve/#comment-16521 And why borrow from the TAF when the FHLB's have been so generous? According to Richard Iley from BNP Paribas, <i>"FHLB advances totalled an annualised USD 746bn in Q3 or 5.3% of GDP. Given this GSE-financed wall of liquidity, it is little wonder that the Fed’s new improved discount window failed to elicit much response last year."</i> If memory serves me correctly I thinks CFC availed itself of $50 billion through this facility, last year alone. The FHLB is the shadow Discount Window. If the TAF funds are priced at 3.95% it means there is plenty of money sloshing about. And why borrow from the TAF when the FHLB’s have been so generous?

According to Richard Iley from BNP Paribas,

“FHLB advances totalled an annualised
USD 746bn in Q3 or 5.3% of GDP. Given this
GSE-financed wall of liquidity, it is little wonder
that the Fed’s new improved discount window
failed to elicit much response last year.”

If memory serves me correctly I thinks CFC availed itself of $50 billion through this facility, last year alone.

The FHLB is the shadow Discount Window. If the TAF funds are priced at 3.95% it means there is plenty of money sloshing about.

]]>