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Martinghoul, do you see any implication to a discount rate hike today as opposed to 1 or 2 months from now(or whatever the market was expecting)?

The thing is, expectations of tightening weaken the stock market which weakens the economy(and sentiment) which makes tightening less likely. Its self-correcting as Pimco's Paul Mcculey explained in 2009

The discount rate is set by the Board of Governors of the fed(not the fomc), bernanke hinted this a while ago, it was expected that the hike would come out of nowhere(as opposed to a fomc meeting), the market is wrong here, this doesnt mean much In fact I'd say when the fed announced they...

One more thing(that public markets are usually not smart enough to realize), the discount rate is set by the board of governors(not the FOMC), so they had to make this hike in a 'emergency' out of nowhere situation, plus Bernanke hinted this a while ago, what markets were expecting, the next...

I do, everyday, and what I see is a fed chairman hinting this move a few days back while saying montary policy wont change. I also see a NY Fed president saying 'extended' means at least 6 months, this means no hike for quite a while and probably more

I was about to short ES right after the close, had to make a phone call, I came back and the bitch gapped down without me, perfect. It appears that IB doesnt have limit on close orders

You might want to re-read the statement, this means nothing for monetary policy. furthermore, the discount window had about $15b in borrowings, lol the horror

Front end wacked even though the fed is saying that discount rate hike doesnt mean monetary policy will change, 'efficient markets' lol?

'several noted that draining operations might be seen as a precursor to tightening and should only be undertaken when the Committee judged that an increase in its target for the federal funds rate would soon be appropriate. For the same reason, a few judged that it would be better to drain...

The key parts from the minutes seemed to be "Most thought that it likely would be appropriate to reduce the supply of reserve balances, to some extent, before the eventual increase in the IOER rate and in the target for the federal funds rate, in part because doing so would tighten the link...

From whom does NLY borrow and at what kind of rate? I much rather play the carry trade directly instead of paying a middleman. We will see Bernanke exit strategy testimony, then I will decide if I move from Jul ZQ to something more risky

I will be the first to say that its surprising that so many in the FOMC are thinking about asset sales. IIRC the last minutes the majority were pondering about more purchases with a few thinking about sales. I'm surprised the front end didnt sold off more

http://en.wikipedia.org/wiki/Gold_teeth I mentioned it as a half-joke

So does the gold standard, devaluation and going off gold are two tatics that were routinely used by govermnents. At the end of the day if the goverment wants to mess things up they can always do, regardless if they print the money themselves or if the supply is set by the needs of dentistry

I believe this might be right, the reverse repos would be essentially a deposit facility where banks will park their short-term money, draining those reserves should put upward pressure on short-term rates, including the t-bills as they seem like competing products So it might be all the same...

Almost all societies in history had activities centrally planned, such as the military, the police, justice, etc Who is to say that allowing the money supply to fluctuate according to the demand and supply for gold in jewlery and teeth is better than a independent central bank with an inflation...

The difference is amount of debt outstading in the Gilded Age compared to today(or the great depression for that matter), you might want to read up on Fisher's debt deflation theory and Soros reflexivity

Maybe IOR, repos, Fed CDs, SFP are all the same thing. They all seem to attempt to lock monetary base in exchange for financial compensation to the private sector in the form of interest payments

Also I routinely hear that the reason they will hike the IOR is to encourage banks to 'sit on their reserves', but as I argue that will only happen if the spread doesnt adjust If inflation is indeed set to fall this year, the people calling for a rate hike this year are essentially saying...

I suppose it will have an impact as it changes the levels of real interest rates making it hard to borrow. However how does the Fed knows a higher level of real interest rates will have a stronger impact than reverse repos or asset sales(as Bernanke seems to suggest when he says IOR is the main...