And now for something completely different..

Monty Python #GIK used this tagline for abruptly changing sketches and so will we, now.

Here's a mind numbing exercise that Vince Foster and I have been chatting about: (and yes..the Death Star is involved)

If you have no life, you can plow through the fed H-8 in your spare time. There's a ton of good info and as the economy has improved we have increased our attention has focused on C&I. The demand side of the zirp era. Enter the death Star.

I was originally concerned that the facility could seize up the system quickly and create a massive transaction circle with the Fed leaving the economy out of the loop. Here's the details: As Excess Reserves move into the Death Star (and monies held by non-banks), the line item will shift to a different line on the H-8. So, some, much of the increase in "loans and leases" is actually just a shift in Fed accounting.

However, once "swapped" over, the entity (if its a PD, bank, or foreigner) can hypothicate the securities he received and lever up. So, outside of a crisis, where everyone runs to the Fed as counterparty, the death Star will actually increase the accounting side of loan and lease growth AND crate the potential for Fed sponsored balance sheet levering. And...over 50% of those balances are held by the branches and subs of foreign institutions ! Yay? Wait what?...

No wonder business TV is yammering on about Go Daddy....and now to something completely different...

 

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