US Overnight Interest Rate Surges to 10%, Fed Injects Emergency $75 Billion – Criminal JP Morgan Bank
Ed.’s note: The fed seems to be panicking here as an emergency $75 billion in cash is injected to curb the short-term borrowing costs in the repo (repurchase agreements) market. A repo is when one party lends out cash (“over night money”) in exchange for a roughly equivalent value of securities, often Treasury notes. This market exists to allow companies that own lots of securities but are short on cash to cheaply borrow money. There was an unexpected rate spike and this sent the fed scrambling with $75 billion. It’s a 24 hour repo operation and there is a whole lot more going on behind the fed scenes than just this $75 billion in cash. Interest rates will probably drop and the fed will announce more QE (quantitive easing).
All the big criminal banks including JP Morgan access the repo market and took an alleged $53 billion of the total $75 billion made available by the fed. The top five banks in the US are involved in 80 percent of the repo market because that is where the cheap money is. The unexpected spike to ten percent forced the fed to bail out banks again and is very similar to what was going on in 2008. This does not look good because it means there is a liquidity crisis.
The silver rigging market has been going on for over 20 years and the SEC has done absolutely nothing to stop it. These people are racketeering criminals, and remember when Donald Trump signed an Executive Order (EO’s can only be signed by private corporations) on December 21, 2017 stating assets can be stripped from people involved in corruption? Well, let’s see if this Executive Order will stick for JP Morgan. JP Morgan will attempt to scapegoat employees but this should not be allowed to stand. All of JP Morgan senior management must be investigated with RICO charges. It wasn’t just “spoofing” that was used to rig the silver market, it was rigged in many other ways. JP Morgan attempted blaming Bear Stearns for the “spoof method” in the silver market rigging but then allowed it to go on for eight years?
How can this banking/financial silver manipulation market rigging system be corrected? It can’t, not when you have incentivized psychopaths running this banking infrastructure:
Source: Mesh Talk
US Overnight Interest Rate Surges to 10%, Fed Injects Emergency $75 Billion
September 18, 2019
Overnight interest rates surged to 10% and no one understands why.
What’s Going On?
Bloomberg reports Overnight Funding Rate Surges to Record Levels.
U.S. money-market interest rates surged for a second day Tuesday as cash reserves in the banking system remained out of balance with the volume of securities on dealer balance sheets.
Amid the squeeze, the effective fed funds rate rose to 2.25%, in line with the top of the Federal Reserve’s target range of 2% to 2.25%.
The rate on overnight general collateral repurchase agreements soared by more than 600 basis points to 8.75%, based on ICAP pricing, before settling back around 7.25%. Surges are commonplace only around quarter- and month-end, so market participants had expected things might return to normal.
On Monday, the rate on overnight GC repo soared by as much as 248 basis points to 4.75%, the highest level since December, according to ICAP pricing, amid the settlement of Treasury coupon auctions and the influx of corporate quarterly tax payments, possibly aggravated by last week’s bond-market selloff, in which investors sold securities back to dealers.
Separately, the Secured Overnight Financing Rate, which is backed by overnight GC repo transactions, rose to 2.43% Monday from 2.20%, New York Fed data show. That’s the highest since July 31.
Federal Reserve Injects $75 Billion Into Financial System
The Financial Times reports Federal Reserve Injects Billions of Dollars Into Financial System
TD securities points the finger at bank reserves.
“We think that the culprit is the scarcity of bank reserves, which are the only asset that provides banks with intraday liquidity. Reserves have been declining since 2014 and we expect them to decline further as Treasury’s cash balance increases and currency in circulation grows.”
The Fed seems to have fixed whatever the problem was with the $75 billion injection. Repo rates are back down, for now.
A reader commented: “Analysts said there were technical factors squeezing the repo market rather than the systemic issues that drove overnight rates much higher during the financial crisis. Now what are the technical factors?”
Sometimes there is an end of month squeeze but this happened on Sept 16 and again September 17.
“This mid-month surge was attributed to a confluence of events that knocked cash reserves in the banking system out of balance with the volume of securities on dealer balance sheets: a corporate tax payment date, settlement of last week’s Treasury auctions, and last week’s bond-market sell-off, in which investors sold securities back to dealers.”
Chris Whalen Chimes In
“We believe the pressure in repo is mostly related to balance sheet scarcity rather than reserve scarcity.— R. Christopher Whalen (@rcwhalen) September 17, 2019
Repo intermediaries do not have the balance sheet capacity to accommodate the demand for financing.” @Barclays
Please go to Mesh Talk to read the entire article.
Source: Market Watch
Metals traders at JPMorgan charged with market manipulation
Sept 16, 2019 | Steve Goldstein
The U.S. Department of Justice charged two current traders and one former metals trader for their alleged participation in a racketeering conspiracy over eight years. Gregg Smith and Michael Nowak — both at JPMorgan JPM, -0.50% — and Christopher Jordan, who left in 2009 and worked at other banks after — were charged. The indictment alleges that between May 2008 and August 2016, the defendants engaged in widespread spoofing, market manipulation and fraud for gold, silver, platinum and palladium futures contracts while working on the precious metals desk at what the DOJ calls Bank A. Nowak’s lawyers in a statement said he did nothing wrong and expect him to be exonerated. Reuters reported last week that Nowak and Smith were on leave, and two former JPMorgan traders, John Edmonds and Christian Trunz, have pleaded guilty to federal charges.
Remember the “wicked witch of silver manipulation?”