Banks still in MAJOR trouble

[MrDODGE]

Lets take a look at this release by the Fed today:

http://www.federalreserve.gov/releases/h3/Current/

Non-borrowed reserves went from -61788 in March to -98981 in April. Banks cannot create reserves themselves. If the demand exceeds the existing supply of non-borrowed reserves, the banking system as a whole has no alternative but to borrow more reserves from the Fed. At what point does the Fed stop printing money?

How is this even possible?

You can drop that to -98981. Bernanke is laughing it up letting banks do whatever they please.

 

[ammo]

one good thing about your chart,all the shaded areas were in upticks,definetly no upticks in 08

 

[MrDODGE]

Quote from ammo:

one good thing about your chart,all the shaded areas were in upticks,definetly no upticks in 08

There is no correlation anywhere on that chart to what is currently happening.

 

[RoughTrader]

Quote from MrDODGE:

There is no correlation anywhere on that chart to what is currently happening.

I'm pretty sure there is no way out of this one. The key word that MSM refuses to use when discussing the "credit crisis" is SOLVENCY.

We are in the throws of a phenomenal solvency crisis, hence the lack of liquidity. Not the other way around.

RT

 

[MrDODGE]

Quote from RoughTrader:

I'm pretty sure there is no way out of this one. The key word that MSM refuses to use when discussing the "credit crisis" is SOLVENCY.

We are in the throws of a phenomenal solvency crisis, hence the lack of liquidity. Not the other way around.

RT

Yep, banks are leveraged to the max. A small portion of their overall portfolio of assets goes under they are in serious trouble. That is what we are currently observing.

Any bank can go under on a small bank run. Scary times that are not over like some people are pushing.

 

[Dr. Zhivodka]

There's no lack of liquidity at all in any form. When a flaming POS like WaMu can raise 7B and dilute the share holders in half....you can bet there no lack of liquidity.

The Fed has mandated that buying shares is a free bet.

Quote from RoughTrader:

I'm pretty sure there is no way out of this one. The key word that MSM refuses to use when discussing the "credit crisis" is SOLVENCY.

We are in the throws of a phenomenal solvency crisis, hence the lack of liquidity. Not the other way around.

RT

 

[MrDODGE]

Quote from Dr. Zhivodka:

There's no lack of liquidity at all in any form. When a flaming POS like WaMu can raise 7B and dilute the share holders in half....you can bet there no lack of liquidity.

The Fed has mandated that buying shares is a free bet.

I don't understand how these banks can raise such huge amounts of money in a short period of time. They MUST be guaranteeing a large return on the investment.

You can't say their isn't a lack of liquidity in the banking system. The original post shows otherwise.

 

[trueliquidity]

This has been discussed extensively before. Long story short, its simple interest arbitrage, effectively making it cheaper to aquire reserves from the fed then from other sources. Although considering the rate of borrowing, and the fact that this has never happened in history, the situation is probably drastically changed from a month ago...

 

[Dr. Zhivodka]

Wamu and the like are carrying a huge book of CDO's that the Fed has implicitly underwritten.

Berancke's Fed has told everyone in plain English that there's no risk. Buy what you you weigh.

Quote from MrDODGE:

I don't understand how these banks can raise such huge amounts of money in a short period of time. They MUST be guaranteeing a large return on the investment.

You can't say their isn't a lack of liquidity in the banking system. The original post shows otherwise.

 

[MrDODGE]

Quote from trueliquidity:

This has been discussed extensively before. Long story short, its simple interest arbitrage, effectively making it cheaper to aquire reserves from the fed then from other sources. Although considering the rate of borrowing, and the fact that this has never happened in history, the situation is probably drastically changed from a month ago...

So banks are using the Fed like a boob. Sucking all the milk dry.

Doesn't seem right....