-- Posted Friday, 28 September 2007 | Digg This Article
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Tracking not only the Fundamentals and Technicals when forecasting major moves, but also tracking the Interventionals, is essential.
One of several Interventional Tools which The Fed uses to intervene in the markets is Repurchase Agreements (“Repos”).
The New York desk of The Fed issues Repos (de facto loans) nearly every business day. The loans are of three types: temporary, permanent and reverse.
Temporary Repos (Temporary Open Market Operations = TOMOs) are the type most often injected into the market (via The Fed’s Primary Dealers). They expire in a range of 1 to 28 days. Permanent Repos (POMOs) never have to be repaid and the Fed occasionally issues these to its Primary Dealers if they really want to juice a particular market hard.
The aggregated Pool of all un-expired Repos (TOMOs) constitutes the amount of funds available for use by The Fed’s Primary Dealers to buy and sell a variety of financial instruments in the variety of markets which The Fed wishes to affect.
Consider the following which demonstrate that these Repo issuances can be potent market movers.
Example #1: The Fed caused the Repo Pool to drop slightly on Friday, September 14, 2007 - - continuing its modest downtrend - - bearish for equities, at that time. But they dramatically increased the Repo Pool Monday, September 17, 2007 as they typically do when they expect/intend to create major moves and they want to have sufficient Repo “ammo” to control and/or launch them.
Sure enough, Monday’s Repo Pool Boost was a harbinger of The Fed’s Federal Funds and Discount Rate cuts on Tuesday, September 18, 2007, and was a partial cause of the equities market launch on that day.
Example #2: On Wednesday, September 26, 2007 the Fed added $15.25 billion in Repurchase Agreements and there were no expirations. That caused the Repo Pool to skyrocket to a record $181 billion.
On Thursday, September 27, 2007 The Fed added two tranches of Repos totaling an unprecedented $38 billion, bringing the intra-day Repo Pool to a record $219 billion.
Today, Friday, September 28, 2007, The Fed added $4.75 billion in Repos which caused the Repo Pool to decline only slightly.
Clearly some Major Market Moves are imminent. With these Repo Additions The Fed is preparing the Technical and Interventional “picture” to implement these Major Moves very soon. Deepcaster has issued a Forecast for these specific Moves in its Alert posted at www.deepcaster.com.
Clearly, The Fed not only uses these Repo injections to move the markets, but also to “paint” technical chart patterns which will facilitate moving the markets soon after the “painting.” It also apparently uses this chart painting to lure some investors - - typically hard money and “tangible asset proponents” - - “offside” prior to attacking their long positions.
Example #3: Deepcaster was able to combine consideration of Interventional Indicators with fundamental and technical ones to allow it to recommend two positions which were subsequently liquidated in August for a profit for investors.
The Fed-led Central Bankers’ Cartel* has other Interventional Tools in its tool kit. The most important of these is the derivatives positions reported at the BIS (Bank for International Settlements - - The Central Bankers’ Bank) website.
Over $6 trillion in derivatives are apparently dedicated to intervention in the petroleum market and over $290 trillion in derivatives (Dec. 2006) are dedicated to interest rate market intervention. We encourage the skeptical to visit the visit the Bank for International Settlements website, www.bis.org (statistics>derivatives statistics>Table 19, for example) to review some of these massive derivatives positions for yourself.
While monitoring Derivatives and Repos injections is both a potent and essential tool for investors and traders, employing these figures by no means automatically creates a profitable “slam dunk” for investors or traders. Rather, it simply raises the probability of making profitable investments and trades as it did for the two Deepcaster-recommended positions on which profit was taken in August, 2007.
For example, one may know that the amount of Repurchase Agreements issued in a particular day sends the Repurchase Pool to an all-time high.
But one does not know exactly in what Sector those funds will be used. Will they be used to prop up the equity markets or the bond markets or to take down Gold & Silver? One can only infer from the Interventionals and from certain other indicators, a probability that the Repo Funds will be used in one Sector and not others.
However, having some key Interventional Information is better than having none. It can, along with fundamentals and technicals, help one avoid losses and maximize profits.
Deepcaster
September 28, 2007
*We encourage those who doubt the existence of Intervention by a Fed-led Cartel of Central Bankers to read Deepcaster’s October, 2006 summary overview of Intervention entitled “Juiced Numbers IV: How the Government Gets the Statistics It ‘Wants,’ Markets Get Manipulated, Citizens Get Deluded, and Worse” at www.deepcaster.com. Also consider the substantial evidence collected by the Gold AntiTrust Action Committee at www.gata.org for information on precious metals price manipulation. Virtually all of the evidence for intervention has been gleaned from publicly available records.
DEEPCASTER LLC
www.deepcaster.com
Wealth Preservation Wealth Enhancement
Financial and Geopolitical Intelligence
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-- Posted Friday, 28 September 2007 | Digg This Article
