Ask Your Doctor or Keynesian Specialist
Lance Brofman's, the Federal Budget Outlook and Implications for the SP500 spawned this comment from Salmo Trutta: "Note: bank capital consists of capital stock, surplus, undivided profits, and all net worth reserves. The counter-cyclically forced expansion of bank capital accounts during the Great-Recession, resulted in the DIMINUTION of commercial bank deposits in the system (and released even more, excess reserves, IBDDs)."
The Nattering One muses... IMO, exclusion of IOER (interest on excess reserves) to domestic banks vis a vis FDIC parking fees, or put another way, Fed payment of IOER to foreign banks furthered the offshore ED (Eurodollar) market explosion.
The banks circumvented and rehypothecated in the ED carry, through foreign dollar debt issuance, leading to repatriation through US T-bill bond purchases, and as paid IOER for foreign banks. This promoted non domestic and non economic investment of the excess.
Side effects can include: increased carry margin chasing, increased off balance sheet derivatives hedging, artificial bond pricing, suppression of interest rates, exposure to carry trade asset term mismatches, severe capital misallocation, economic sluggishness and drowsiness.
Warning: take only under qualified central bank chair supervision. Prolonged exposure greater than 80 months is not recommended. If side effects are left untreated, they can result in eventual long term economic malaise, systemic failure and middle class death.
If side effects persist: immediately cease taking QEZIRP and consult your fiduciary specialist. If you suffer from ED, ask your doctor or Keynesian specialist if QEZIRP (QuantitativeEasingZeroInterestRatePolicy) is right for you.
The Nattering One muses... IMO, exclusion of IOER (interest on excess reserves) to domestic banks vis a vis FDIC parking fees, or put another way, Fed payment of IOER to foreign banks furthered the offshore ED (Eurodollar) market explosion.
The banks circumvented and rehypothecated in the ED carry, through foreign dollar debt issuance, leading to repatriation through US T-bill bond purchases, and as paid IOER for foreign banks. This promoted non domestic and non economic investment of the excess.
Side effects can include: increased carry margin chasing, increased off balance sheet derivatives hedging, artificial bond pricing, suppression of interest rates, exposure to carry trade asset term mismatches, severe capital misallocation, economic sluggishness and drowsiness.
Warning: take only under qualified central bank chair supervision. Prolonged exposure greater than 80 months is not recommended. If side effects are left untreated, they can result in eventual long term economic malaise, systemic failure and middle class death.
If side effects persist: immediately cease taking QEZIRP and consult your fiduciary specialist. If you suffer from ED, ask your doctor or Keynesian specialist if QEZIRP (QuantitativeEasingZeroInterestRatePolicy) is right for you.
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