omg bank reserves

[solarbird]

I don't even know what to make of this anymore. The banking system, as a whole, as of the 26 March report, is over $100 BILLION short of reserves requirements, except for borrowed money from the fed.

H.3 (502)
AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND THE MONETARY BASE
Not adjusted for changes in reserve requirements
Not seasonally adjusted
Millions of dollars

Date	Total	Non-borrowed	Required
2007-Nov.	41863	41497	40187
Dec.	42715	27285	40970
2008-Jan.	44058	-1602	42423
Feb.	42816	-17341	41108
Mar. 12	40490	-19741	39087
Mar. 26(p)	44534	-61731	39913

Comments

[cuneiforms.livejournal.com]

D:

[angharads-house.livejournal.com]

well, that appears to have gone deeply ugly; perhaps now the most sustainable COA includes planting one's own vegetable garden?

[never much cared for lawns, anyway ^_^ ]

but seriously, those numbers would tend to suggest that the next move will involve printing bucketsful of money....

would be very interesting to try normalising all these statistics against constant reference price for crude oil.

[meesto.livejournal.com]

My well informed sources have indicated that the primary reason for this massive shortfall in reserves is because it costs too much to vault bank cash for various institutions to cover their daily shortfalls and that it is far cheaper to send it all to the local Fed branch and handle the rest as electronic transactions using other collateral.

While my source is well informed and purports to be very experienced (as in participated in this stuff in the 80's and 90's), I can only offer it as anecdotal. Regardless it makes an interesting counterpoint to the whys of the massive negatives shortfall.

Personally I think we are witnessing the adoption of all banking by the fed in a "one ring to rule them all" sort of way, which, in the end, results in hyper stagflation, and horrible social costs that are required for reformation.

[solarbird]

Vault cash means something else. Vault cash is fine. However, in terms of what I think they meant - that argument has been made, I've even read the article I suspect they read, it's been quoted a lot ^_^ - but stupidly (I blame the cold) I can't remember either set of arguments. I remember that the counter-argument had merit, however.

[tanthalas101.livejournal.com]

Now there is a quasi-explanation on the FRB website: https://federalreserve.gov/releases/h3/nonborrowedreserves.htm

It seems to me like this is a very wordy way of saying "move along, there's nothing to see here" when in fact there is quite a lot to see, and its all gory. But what do I know?

[solarbird]

Yes, it basically just reiterates how the number is calculated in such a way as to make it look like everything is fine, when, well, not so much afaict. I don't like it.