Here is an article that talks about the repo operations. It was referenced
in the most recent Trendline Dynamics email.
https://wallstreetonparade.com/2019/12/trump-and-the-stock-market-are-the-winners-in-the-feds-repo-loan-binge-heres-the-losers/
On Sat, Feb 15, 2020 at 8:51 AM Nicole Lee <authornicolelee1@xxxxxxxxx>
wrote:
Interesting, very valuable information. Thank you.
On Sat, Feb 15, 2020, 7:05 AM Bob T <bobtsgt@xxxxxxxxx> wrote:
Thanks for detailed write up Alan. This has been something I have been
keeping track of off and on over the past 6 months. Makes you wonder about
the sneakiness of all the current buy ups in the past 5 months. Eventually
the buying has to stop and will most likely do at the wrong time.
Bobby
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*From: *Alan Shrock <alan.shrock@xxxxxxxxx>
*Sent: *Saturday, February 15, 2020 5:05 AM
*To: *CincySMI@xxxxxxxxxxxxx
*Subject: *[cincysmi] Federal Reserve Overnight Repurchase Agreements
(Repo Agreements)
This series is constructed as the aggregated daily amount value of the RP
transactions reported by the New York Fed as part of the Temporary Open
Market Operations.
Temporary open market operations involve short-term repurchase and
reverse repurchase agreements that are designed to temporarily add or drain
reserves available to the banking system and influence day-to-day trading
in the federal funds market.
A repurchase agreement (known as repo or RP) is a transaction in which
the New York Fed under the authorization and direction of the Federal Open
Maker Committee buys a security from an eligible counterparty under an
agreement to resell that security in the future. For these transactions,
eligible securities are U.S. Treasury instruments, federal agency debt and
the mortgage-backed securities issued or fully guaranteed by federal
agencies.
Federal Reserve Bank of New York, Overnight Repurchase Agreements:
Treasury Securities Purchased by the Federal Reserve in the Temporary Open
Market Operations [RPONTSYD], retrieved from FRED, Federal Reserve Bank of
St. Louis;
https://fred.stlouisfed.org/series/RPONTSYD
On September 17, 2019, the Federal Reserve Bank of New York began
conducting temporary open market operations through overnight repurchase
agreements: That is, it purchased Treasury securities held by banks.
From May 19, 2015 until September 16, 2019 the total amount of repurchase
agreements amounted to $923,000,000 in 6 transactions. Since September 17,
2019, there have only been 6 days where there was no repurchase agreement
activity. The total amount of money that the Federal Reserve has pumped
into the system stands at $4,169,411,000,000 as of February 14, 2020. I
chose to show the amounts fully written out so they would have the proper
impact. Another way to see it is that a little over 4,500 times as much
money has been poured into the system in a 5 month span as was added to the
system in the previous 40 months.
At the very least, the activity of the past 5 months stands out like a
sore thumb and would seem to indicate that substantial changes from what
was the norm for the previous 40 months have taken place. It definitely
bears watching to see if this becomes the new norm, and if so what has
caused the sudden dramatic change.
--
Alan W, Shrock
9513 Colegate Way
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"Are we being good ancestors?" - Jonas Salk
