What a bunch of duplicitous and dishonest pieces of garbage these people are...
How many months have we been told that they had to increase the Reserve Assets at the Depositories with all the "repo!" BS ever since September... covering up their incompetence where they had a requirement of 10% of Deposits and Deposits were $13T so they reduced THEIR OWN RESERVE balances below $1.3T and created a Reserve deficiency...
So they go for months trying to create this big smokescreen about 'Reserves!" and adding all these nonrisk assets to Depositories... like it was a real technical issue or something...
Now in the middle of "virus!" armageddeon they just come out one day and say "well... now the requirement is ZERO!"..
Why didnt you just do this in September then assholes?????
These are some of the most incompetent and dishonest people on planet earth... if our medical and healthcare people were like this we would soon all be dead...
These people should all be shit canned like yesterday....
📢 The Federal Reserve eliminates banking reserve requirements starting tomorrow where banks are no longer required to keep any cash reserves to secure deposits (previously 10%)— CryptoCurrency News (@CryptoBoomNews) March 25, 2020
Time For Plan ₿ pic.twitter.com/6MhMIvfQw3
5 comments:
But banks are still constrained by leverage ratios?
I thought this goes well with Matt's the Fed are morons theme. I wonder what the trade was for the protection that they are now getting called on.
https://www.bloomberg.com/news/articles/2020-03-29/mortgage-bankers-ask-sec-to-save-them-from-wave-of-margin-calls
Sure... but they added about 500b of non risk assets from mid sept until they started this new reserve add 2 weeks ago telling us it was necessary...
Sths they stepped on Treasuries too 2 weeks ago ...
They went in big for MBS 2 weeks ago and drove the prices down so far they caused margin calls at dealers who weren’t having any problems before the Fed crashed it ...
Congold what does the RRR Reserve Requirement Ratio have to do with leverage ratio?
RRR = Reserves Assets /Deposit Liabilities = 0.1
LR = (A-L)/A = 0.095
They are independently regulated by the Fed...
Increasing Reserves to increase the RRR (so banks have more “Reserves to lend out!”) depresses the LR and causes banks to mark down risk assets... and if the policy is large enough causes a credit market shutdown/ crash...
Thanks for the explanation.
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