Friday, August 14, 2009

Fed Balance Sheet & Monetary Base, Supply

(note: when possible I'm trying to avoid the reported 'average daily' data)

  • Securities held outright increase $25.58 Bil ($23.6 Bil in T's) to $1,382 Bil
  • Since Aug 13, 2008 cash in circulation has increased $77.7 Bil to $872.8 Bil
  • Bank deposits increased by $52.4 Bil, while Treasury deposits decreased by $25.8 Bil, for a net increase in deposits at the fed of $24.9 Bil on the week. Deposits of banks moves to a total of $777 Bil
  • FRB Capital dips by $562 mil
  • There was a large jump in Secondary Credit - a type of borrowing from the fed that is considered more risky than primary credit, carrying a 50bp penalty over primary(75+ over fed funds). Throughout the crisis the 2-week daily average never rose above $117 mil, it now stands at $527 mil. The 1 wk average stands at $805 mil and as of Wednesday it has apparently dropped to $705 Mil. - "Secondary credit is available to depository institutions that are not eligible for primary credit... Secondary credit is available to meet backup liquidity needs when its use is consistent with a timely return to a reliance on market sources of funding or the orderly resolution of a troubled institution. Secondary credit may not be used to fund an expansion of the borrower's assets. The secondary credit program entails a higher level of Reserve Bank administration and oversight than the primary credit program..." Primary Credit has moved up to $38 Bil as the 1wk average daily amount was $33.9 Bil. As some of the Fed's liquidity programs wind down, and banks return to more traditional short term financing, jumps in primary and secondary credit will give us better signals about localized distress within the banking sector.
  • Monetary Base(reconstructed with NSA currency and reserve data from the consolidated BS - the rest, less clearing balances and adjustments, is '2 week daily average' data from H.3) = Currency ($872.8 Bil) + Bank Reserves ($777.03) + Surplus Vault Cash ($12.48 Bil) = $1.662 Trillion
  • Other Major Fed liabilities: Treasury Supp Acct continues to stay at a flat $200 Bil, the General Acct dropped $25.8 Bil to $35.8 Bil, and Reverse Repos (where the fed sells treasuries to PDs at a haircut, with an agreement to buy them back later at a higher price, in order to drain reserves and/or drive up the fed funds rate) increased $836 Mil to $67.7 Bil. Total Liabilities of the FRBs = $1.967 Trillion
  • NSA M1 (as of Aug 3) = $1.71 Trillion
  • NSA M2 (as of Aug3) = $ 8.31 Trillion
  • NAS M2 - time deposits - retail MM funds = $6.17 Trillion