Fed extends USD swaps with major central banks

FOMC statement: Federal Reserve, European Central Bank, Bank of Japan, Bank of Canada, Bank of England, and Swiss National Bank
The Federal Open Market Committee has authorized an extension through August 1, 2011, of its temporary U.S. dollar Liquidity swap arrangements with the Bank of Canada, the Bank of England, the European Central Bank, the Bank of Japan, and the Swiss National Bank. The swap arrangements, established in May 2010, had been authorized through January 2011. ...

Extended Fed Currency Swaps Not Sign of Fresh Concern
By Michael S. Derby The Federal Reserve ’s extension of it currency swap arrangements with other major Central Bank reflects continued unease around the state of European Financial Markets. That said, the decision to maintain the swap lines with the Bank of Canada , Bank of England , the European Central Bank , the Bank of Japan and Swiss National Bank , should be viewed more as a protective action on the part of American officials. It is not, most Economists reckon, a sign that some new ...

US Fed extends dollar lifeline for central banks
The US Federal Reserve on Tuesday extended until August an emergency tool for other Central Banks to access US dollars, amid market jitters and high demand for the safe haven greenback. The deal, which had been due to expire in January, allows the Central Banks of Britain, Japan, Canada and Switzerland, as well as the European Central Bank, to exchange local currency for US dollars. The swap agreements were sealed in May, but as a Debt crisis and slow Economic Recovery continues to roil markets ...

Fed extends program to ease Europe debt crisis...
The Fed is Lending dollars to other Central Banks in exchange for their currencies. The Central Banks can lend those dollars out to banks in their home countries to ease financial turmoil. The Fed's "swap" program was set up in May as fears rose that Greece's Debt crisis could engulf other European countries. European Banks need dollars to lend to companies across the continent. European companies that have operations in the U.S. pay their employees in dollars and buy raw materials with the U.S....

Fed Extends Currency Swap Lines Over Eurobank Dollar Funding Concerns
The party line is everything is fine in bank land….even Eurobank land. But some recent developments suggest otherwise. The business news on Europe has pretty much daily updates on the unfolding and linked Sovereign Debt/ bank solvency crisis. The officialdom insists this looming problem can be resolved but most observers think it can’t be in the absence of a fiscal union, which is a political bridge too Far Right now. In a not-widely-noticed replay of pre-crisis conditions, the co...

Economist recommends raising rates to 2% to stimulate lending
Once again, another Economist telling us that we should raise the benchmark Federal Funds Rate to 2%. Steve Hanke is an Economics Professor at Johns Hopkins and a Senior Fellow at the Cato. I would recommend 1.5%, but that is just a guess. Stay tuned as we have a more substantive piece coming up about where the Interest Rates should really be. Via Cato: In the monetary sphere, the Fed has, in a standard Keynesian manner, flooded The Economy with high-powered base money since the onset of the cr...

Fed extends dollar lifeline for central banks
The Federal Reserve Building in Washington, DC. The US Federal Reserve on T... The US Federal Reserve on Tuesday extended until August an emergency tool for other Central Banks to access dollars, amid market jitters and high demand for the safe haven greenback. The deal, which had been due to expire in January, allows the Central Banks of Britain, Japan, Canada and Switzerland, as well as the European Central Bank, to exchange local currency for dollars. The swap agreements were sealed in May,...

Fed extends program to ease Europe debt crisis
The Federal Reserve extended a program set up earlier this year to ease strains from the European Debt crisis. The program, which was set to expire in January, will now run through Aug. 1, the Fed announced on Tuesday. The Fed is Lending dollars to other Central Banks in exchange for their currencies. The Central Banks can lend those dollars out to banks in their home countries to ease financial turmoil. The Fed's "swap" program was set up in May as fears rose that Greece's Debt crisis could eng...

Bank Of Japan Holds Pat; Slightly Cuts Output View
TOKYO -- The Bank of Japan held pat on Monetary Policy as widely expected Tuesday and maintained its overall assessment of The Economy, saying it's showing signs of a moderate recovery. But it tweaked down its view on output, saying it's recently declined slightly. The BOJ's vote to keep Interest Rates unchanged in a range of zero to 0.1% was unanimous. The Central Bank said in a statement it will steadily purchase various assets and provide longer-term funds through its 35 Trillion yen ($418 bi...

Fed throws euro banks a lifeline
Fed throws euro banks a lifeline Posted by Colin Barr December 21, 2010 4:19 pm For an outfit whose policies supposedly are plunging the world into unspeakable conflict, the Federal Reserve is doing an awful lot to avoid another meltdown. The Fed said Tuesday it would extend The Dollar swap lines it provides to Central Banks in Europe, Japan and Canada in a bid to avoid a cash crunch like the ones seen to such devastating effect in 2008. Your dollars, our problem? The swap lines, under which...

Feds Bullard: Full of Self-Contradictions
James Bullard, President of the Federal Reserve Bank of St. Louis was on CNBC Monday, December 20, 2010 mostly defending the Fed’s Controversial $600 billion Treasury purchasing program (QE2) announced in Nov. What struck me as totally self-contradictory were Bullard’s statements regarding the QE2, treasury yield, Inflation expectations, and inflation, which I will outline and rebuff below. Bullard – Higher Treasury Yield = QE2 Success During the interview, aside from the ...

Fed Increases its Treasury Security Purchase Limit to 70%
When the Federal Reserve decided to execute a new course of Monetary Policy in November, it had a problem. It wanted to buy more longer-term Treasury securities, but it was already nearing its concentration limit for the amount of each specific Treasury Security it could hold. But since the rule was self-imposed, it lifted the limit, effectively doubling the amount it can purchase of any given Treasury Security issue. This is a pretty big change. The Central Bank had temporarily relaxed its 35 ...

Summary Box: Treasury flat in light trading
LIGHT TRADING: Treasurys traded in a tight range Tuesday. The 10-year note rose 34.3 cents for every $100 invested. That lowered the yield to 3.30 percent from 3.35 late Monday. MORE FED BUYING: The Fed bought $9.4 billion in Treasurys, including $1.61 billion in Inflation-indexed notes. The purchases are part of the Central Bank's $600 billion bond-buying program aimed at lowering long-term Interest Rates. FIGHTING THE FED: Yields have been rising steadily since early November, even after the...

Japan's export growth accelerates
Exports grew by 9.1% compared with a year earlier, the finance ministry said, compared with 7.8% in October. However, analysts remain concerned about the strength of Japan's economy. Also on Wednesday, the government forecast Economic Growth of 1.5% next year, a sharp fall on the 3.1% it predicts for this year. It also forecast that consumer prices will stop falling - they have been on a downward spiral for 20 consecutive months. However, this would not mean the battle against Deflation is ...

Hungary's Central Bank Raises Interest Rates Again
LONDON -- Hungary's Central Bank on Monday increased the base rate by 25 basis points to 5.75%, effective from Tuesday. In contrast, most analysts expected no change to Interest Rates. In November, the Central Bank had raised rates by 25 basis points to 5.50%. The decision "will only add to rising tensions between the Central Bank and the government," said Neil Shearing, senior Emerging Market Economist at Capital Economics, in a note. "The bank justified last month's move on the grounds that th...

CENTRAL BANKING 101: WHAT THE FED CAN DO AS "LENDER OF LAST RESORT"
That was the figure recently revealed for the Fed's "emergency Lending programs" to bail out the banks. "$12.3 Trillion of our Taxpayer money!" shout the bemused spectators as pigeons emerge from the showman's gloved hands. "We could have used that money to build roads and bridges, pay down the state's debts, keep Homeowners in their homes!" "Not exactly tax money," says the magician with his mysterious Mona Lisa smile. "When did you have $12.3 Trillion in tax money sitting idle?" Not only ...

Fed throws euro banks a lifeline
For an outfit whose policies supposedly are plunging the world into unspeakable conflict, the Federal Reserve is doing an awful lot to avoid another meltdown. The Fed said Tuesday it would extend The Dollar swap lines it provides to Central Banks in Europe, Japan and Canada in a bid to avoid a cash crunch like the ones seen to such devastating effect in 2008. Your dollars, our problem? The swap lines, under which the Fed provides foreign central Bankers with essentially unlimited stocks of doll...

EUR/CHF Continues To Make Historic Lows On Euro Zone Tensions
The euro is slightly firmer today vs. The Dollar today, but continues to make new historic lows vs. Swiss franc just below 1.25, suggesting that euro zone tensions remain strong. EM currencies continue to firm, suggesting a bit of decoupling from the euro zone crisis. However, trading ranges are fairly narrow as we head into the holiday weekend. The ECB said will lend out EUR149.5 bln in 3-month loans, and that 270 banks bid for the money. Banks need to repay EUR96.9 bln in maturing 12-month l...

China's forex inflows slow in November but still high
The amount of foreign currency flowing into China slowed in November but was still the second highest monthly total in 2010, the government said on Monday, amid official efforts to contain Inflation. Beijing has expressed concern about the flood of overseas money into the world's second-largest economy which it fears is fuelling inflation and helping to push property prices out of the reach of most ordinary Chinese. The large flow of foreign currency -- partly driven by strong demand for Chinese...

Tonight Im gonna party like its Oct 2007
Coincident with a 6% rally thus far in Dec and joining almost every single Strategist on Wall St that is Bullish for 2011, Investors Intelligence said the number of Bullish newsletter writers has reached its highest level since mid Oct ’07, 1 week after the S&P 500 had its all time record high close of 1565. Bulls rose 2 pts to 58.8 (got as high as 62 in Oct ’07) while Bears were little changed at 20.6 (got as low as 19.6 in Oct ’07). The bulls can be right for a period ...

Ignorance Is Bliss: The Matty Edition...
People occasionally email me asking why I continue to rag on Matthew Yglesias. It's hard to answer that question in a civil tone, simply because the "why" should be blindingly obvious to anyone with the I.Q. of a potted plant. Here's a perfect example of what I mean: When it comes to wages, the basic story of recent decades is redolent of Scrooge. Real average hourly earnings (excluding fringe benefits) now stand roughly at 1974 levels. Yes, that’s right, no real increase...

The Federal Reserve: Aging Magician of the Welfare State
December Currency deposits__ supply_          growth rate        increase__              2005                       728.9              3,233.3 ...

Fed throws euro banks a lifeline
For an outfit whose policies supposedly are plunging the world into unspeakable conflict, the Federal Reserve is doing an awful lot to avoid another meltdown. The Fed said Tuesday it would extend The Dollar swap lines it provides to Central Banks in Europe, Japan and Canada in a bid to avoid a cash crunch like the ones seen to such devastating effect in 2008. Your dollars, our problem? The swap lines, under which the Fed provides foreign central Bankers with essentially unlimited stocks of doll...

Federal Reserve issues interim rule amending Regulation Z to clarify certain disclosure requirements of the Mortgage Disclosure
The Federal Reserve Board on Wednesday approved an interim rule amending Regulation Z, which implements the Truth in Lending Act (TILA). The Board is issuing this interim rule to clarify certain aspects of a September 24, 2010 interim rule, in response to public comments. The September interim rule implements provisions of the Mortgage Disclosure Improvement Act (MDIA) which amended TILA to require mortgage lenders to disclose examples of how a loan's Interest Rate or monthly payments can change...

Sales Of 'Existing Homes' Rose 5.6% in November
What is this? "Existing-home sales got back on an upward path in November, resuming a growth trend since bottoming in July," the National Association of Realtors just reported. It says that sales of single-family homes, townhouses, Condominiums and co-ops rose 5.6 percent from October, to a seasonally adjusted annual rate of 4.68 million. Sales have now risen in three of the past four months, though they remain well below the 6.49 million pace of November 2009 — when tax incentives gave th...