ES -- DX/CL -- isee -- cboe put/call -- specialist/public short ratio -- trinq -- trin -- aaii bull ratio -- abx -- cmbx -- cdx -- vxo p&f -- SPX volatility curve -- VIX:VXO skew -- commodity screen -- cot -- conference board

Friday, August 07, 2009

 

excess reserves and liquidity


so as not to lose sight of it, alea observes the declining excess reserves in the banking system, a function of unwinding fed assets (such as currency swaps or term auction credit) outpacing the portfolio accumulation (ie, monetization) of treasuries and MBS. in the comments, i speculated on the association between temporary open market operations (effectively the term auction facility, or TAF) and liquidity available to the financial system as a driver for market prices. the slosh report is an easy place to view the trend in TOMO/TAF (the "slosh"); another is the FRED graph. jck is as always gracious.

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markets have been rallying despite the 'slosh report' trend.

 
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