, , ,

Just the other evening, I was talking to MB about some TPC business. I relayed that I was tired of the daily dose of debt news from the WSJ – every day bringing another installment of the REPO BUCKS game as if it was something completely new. Then, today, the announcements changed.

The Federal Reserve Bank of New York is boosting the amount of temporary liquidity it is willing to make available to financial markets starting this week, the bank said on Wednesday.

It said that as of Thursday, the minimum size of its overnight repurchase-agreement, or repo, operations will rise to $120 billion, from what had been at least $75 billion. Longer-term operations will rise from a minimum daily offering size of $35 billion and go up to $45 billion in interventions scheduled for Thursday and Oct. 29.

Do the math! Now, every single day, they can (and will) add $165 Billion in fake money for the banks. Why? Honestly, who cares? How long will this continue? Who cares? $165 Bn is the near-equivalent of the entire nominal GDP just 100 years ago. Every day.