20 Billion in repo's expire next 2 days
13 billion in fresh cash required for Treasuries in the same time period.
How long can AG keep up the pumping? Once he stops this market is going to panic like a drug addict with no stash left.
He is close to the outer limits.
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federal reserves...
He may be close to the outer limits, but as long as he is holding the checkbook he has to be considered a potential market moving force that, imo, should be treated with utmost respect. A dark sider's potential worst nightmare, if you will.....
Remember, he is, in essence, not only fighting to appear to single handedly rescue his country's economy (from his earlier blunders, I'm driven to add), but simultaneously striving to redecorate the final images of him that will be recognized in the eyes of history.
Your guess is as good as mine as to which of the two 'missions' represents the higher priority to him <g>
Imo, the sacking of O'Neil in favor of ultra team player John Snow was the signal that the price of poker was going up big time and the new A-Team pressure would be brought to bear, on a continuing basis, upon the dark side players who choose to look at the poor fundamentals as their guide.
How long can he keep on pumping, you ask?
Andrea is prolly the only one who really knows for sure, but putting the brainwashed and seemingly eager to please Snow into the starting lineup greatly extended their reach, imo.
In my view, "don't fight the Fed" never had more meaning.
Kindly excuse the exercise in stating the obvious.... <gg>
It's prolly also pretty obvious to some that I don't have a clue as to what I'm trying to say.
Which brings me to the real reason I clicked on "respond to"
Have you seen this?
The hypothesis offered is that the Federal Reserve artificially supports the DOW and the US currency with permanent and temporary repurchase agreement funding. That funding is then utilized in the open markets by the borrowers, the large trading houses of Wall Street. Abnormal activity in the futures markets suggests that the home for this funding are the major index futures which, when bought, support the underlying individual stocks.
The metric to watch is not the daily repo issuances but the repo pool totals which can only be obtained by keeping at least a 28 day running total of both the repos and their scheduled expirations. For example, an issuance of $20 Billion means little if there is an expiration of the same amount that day. The key is to measure the aggregate pool totals since it is that pool that determines how much repo money can be used to buy index futures on any given day.
Today's [May 22, 2003] Fed Repo Action
As suggested yesterday, the Fed did not allow the repo total pool to fall today. They issued $15.25 Billion in new repurchase agreements. When the $11.25 Billion in expirations are accounted for we see that the repo pool has risen to $40 Billion. The DOW this morning [5-22-03 10:40AM] is up 85 points. It’s an open question whether the Fed will ever allow the DOW to fall so index shorters beware! It is far better to be long gold and its shares than short the markets under this external Fed interventional policy.
The repo pool metric is gaining validity as time passes as the DOW keeps tracking with the repo total pool number. So far the $30 Billion level seems necessary to hold the DOW level. Above that and the DOW rises
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I would appreciate hearing any thoughts you might have on this.
Good luck,
Dan
Dan 
AI
Market Data 
Markets 
