Did The Fed Just (Surreptitiously) Bail Out Europe?
Courtesy of Karl Denninger at The Market Ticker
No, not just Greece – all of Europe. Without Congressional authorization or notice, of course.
Hattip to a nice emailer….
Or if you prefer it on a one-year time scale…
That nice little vertical line is a gain of $421.8 billion dollars of outstanding loans and leases in one week’s time.
WHERE THE HELL DID THAT MONEY GO AND WHAT COLLATERAL WAS TAKEN AGAINST A FOUR HUNDRED BILLION DOLLAR INCREASE IN OUTSTANDING LOANS?
You won’t find anything like that in the records – because it’s never happened before. That’s beyond unprecedented, it’s ridiculous, and assuming it’s also accurate, someone has some ‘splaining to do on what clearly appears to be some sort of back-door game being run.
Update: It has been suggested that this may be related to the FASB changes and securitized loans coming back on the balance sheet. If so, where’s the alleged memorandum items on the other side and the footnote on FRED? The latter is missing, but the necessary data on FRED to confirm that is not yet updated.
Nonetheless, if this is the case, it’s still bad (just not catastrophic) as this will directly hit capital ratios. Or, put another way, where’s the additional capital that "should" be there to support what is now on balance sheet and was previously off (never mind that it was crooked as hell to have it off in the first place!)
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Karl’s follow-up post:
What The Hell? (Outstanding Credit)
Go read this Ticker first (it’s right below this one on the top page)
Some more digging around FRED has found additional disturbing data. Specifically:
WHAT?
An $84.2 billion increase in one month, or annualized, a significantly more than 100% run rate?
Something’s not right here folks. I can’t find the rest of the one-week ramp yet, as the data is not current enough for me to do so, but that’s an insane increase.
C&I loans picked up a bit (614 .vs. 591.8) which is a significant move as well, but then again it also dropped a lot between 3-17 and 3-24 (605 to 591.8), so in context it’s not nearly as material.
Where did the more than $400 billion go that was "borrowed"?
