Wednesday, Mar 12, 2008
Voice of reason
Bloomberg: Dollar Declines on Speculation Fed Rescue Package Won't Succeed
The dollar fell on speculation the Federal Reserve's plan to provide funds to banks won't be enough to break the gridlock in interbank lending and stem credit losses.
Posted by 51ck-6-51x @ 10:10 AM (174 views) Add Comment
1 Comment
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1. happyrenterz said...
The Fed's Swap Meet "
Why $200 billion? Because primary dealers hold $139.7 billion agency securities and $60.2 billion mortgage-backed securities.
The Primary Dealers are heavily short Treasuries at all times. They are heavily long all other debt securities simultaneously. The level of securities lending in recent months is unprecedented in all of human history, by an order of magnitude of 10.
The Fed is now responding to the pressure of the imminent collapse of the Primary Dealers and major banks worldwide, because not only are the PDs heavily short the stuff that is going up, Treasuries, they are heavily long the stuff that is going down, which is all other debt securities."