Fed CHANGES Really Scary Fed Charts

It looks like the Fed took the TAF (Term Auction Facility) borrowing out of the data calculation, thus neatly removing $50 billion dollars from the picture. See my original post here: Really Scary Fed Charts, Why Bernanke Will Furiously Cut

The original chart I posted did not yet include the January TAF results as they were only released on January 29th. I posted the charts on January 30th. Therefore, the chart was short $30 billion… making the real spike down much larger.

Removing TAF borrowings results in a less ‘distressing’ picture. TAF auctions are ongoing. The next one is on February 11th. We won’t know the results until February 25th.

Notice the change in the definition of the data on http://research.stlouisfed.org/fred2/series/NFORBRES for 2007-12-01 has been changed in the notes to:

Observation Range: 1959-01-01 to 2007-12-01
Last Updated: 2008-02-01
Notes: Prior to 2003-01-01, the data are calculated as excess reserves minus total borrowings plus extended borrowings. From 2003-01-01 till 2007-11-01, the observations reflect excess reserves minus total borrowings plus secondary borrowings. From 2007-12-01, the definition changes to excess reserves minus discount window borrowings plus secondary borrowings.

TAF results to date:

Release Date: December 21, 2007

For release at 10:00 a.m. EST
On December 20, 2007, the Federal Reserve conducted an auction of $20 billion in 35-day credit through its Term Auction Facility. Following are the results of the auction:

Stop-out rate: 4.67 percent

Total propositions submitted: $57.664 billion
Total propositions accepted: $20.000 billion
Bid/cover ratio: 2.88

Number of bidders: 73

Release Date: January 29, 2008

For release at 10:00 a.m. EST
On January 28, 2008, the Federal Reserve conducted an auction of $30 billion in 28-day credit through its Term Auction Facility. Following are the results of the auction:

Stop-out rate: 3.123 percent

Total propositions submitted: $37.452 billion
Total propositions accepted: $30.000 billion
Bid/cover ratio: 1.25

Number of bidders: 52

The next TAF auction is on February 11th, 2008. The results will be announced on February 25th, 2008.

Term Auction Facility
Under the term auction facility (TAF), the Federal Reserve will auction term funds to depository institutions. All depository institutions that are eligible to borrow under the primary credit program will be eligible to participate in TAF auctions. All advances must be fully collateralized. Each TAF auction will be for a fixed amount, with the rate determined by the auction process (subject to a minimum bid rate). Bids will be submitted by phone through local Reserve Banks.

Everything you ever wanted to know about the TAF.

Money-Market Rates in Dollars Rise for First Time in a Week: “Money-market rates in dollars rose for the first time in a week.

The London interbank offered rate, or Libor, for overnight loans in dollars climbed 9 basis points to 3.24 percent today, its biggest one-day gain since Dec. 31, according to British Bankers' Association data. The three-month rate rose 5 basis points to 3.15 percent.”

Some stress is definitely creeping back into the system...