Sunday, September 4, 2016

Fed Admits Hand in '08 Crash. QE Down in '16 First Year Since '08

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*Tracking SOMA, the Fed made another large sale of assets.
*The market has followed these Fed moves as we know QE has been a huge support for the markets.
*We catch Fed Chair Yellen admitting that the Fed may have had a hand in the 08 crash.





We've been tracking the Federal Reserve balance sheets. Stocks have tracked these moves. We saw a big move up last week and the week before. This week the Fed gave that all back selling to the market. The Fed selling is the opposite of easing and in line with tightening. The market has proven to move in tandem with Fed moves. In addition, the granddaddy of all Fed selling may have caused the infamous 2008 crash. That's what the Fed chair hinted to last week.
Here're the latest data of Fed balances.
BalancesWeek ChgYTD Chg
2016-07-134213862766647.870.00%-0.27%
2016-07-204225546202408.160.28%0.00%
2016-07-274209382864330.18-0.38%-0.38%
2016-08-034209395820560.100.00%-0.38%
2016-08-104209400820518.780.00%-0.38%
2016-08-174222046297752.820.30%-0.08%
2016-08-244227711875610.080.13%0.06%
2016-08-314212673983393.06-0.36%-0.30%

All Data: New York Fed
After two weeks of reserves-building they went down this last week. That means the Fed sold assets. They mainly reduced their MBS holdings.
Here's the numbers graphically.




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