borodog's mistaken understanding of M3...don't listen to his drivel

[Ps3tn0NcYk]

With regards to repurchase agreements -- are those measured in M3 transactions conducted with the FOMC, or between private institutions?

I realize the Fed is a private institution, but you get my drift.

Also the Fed has, I believe, increasingly used Repos to add or subtract liquidity in the financial markets.

I track Fed Repos as they can be a decent gauge of financial conditions and occasionally provide clues into future interest rate policy.

[DcifrThs]

[ QUOTE ]
With regards to repurchase agreements -- are those measured in M3 transactions conducted with the FOMC, or between private institutions?

[/ QUOTE ]

M3 includes the total notional value of repos by both the fed and private institutions.

[ QUOTE ]
I realize the Fed is a private institution, but you get my drift.

Also the Fed has, I believe, increasingly used Repos to add or subtract liquidity in the financial markets.

I track Fed Repos as they can be a decent gauge of financial conditions and occasionally provide clues into future interest rate policy.

[/ QUOTE ]

interesting. while i knew the fed used them in FOMC operations, i didn't think they were increasingly anywhere nearly as rapidly as the private financial institution/hedge fund use of them.

further, the fed's use of repos i think are more indicitive of liquidity conditions and the spread between the effective fed funds rate and the target fed funds rate.

what data do you have regarding the increased fed use of repos and future interest rate policy? could it be that those increasing use of repos are actually a proxy for liquidity issues which could capture future monetary policy direction (like it did in the latest crisis).

that is an interesting point though.

Barron