Banks now have a NEGATIVE reserve ratio

J

jonahtrainer

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Check out this information I came across combing through the Federal Reserve reports looking for cues on why the meltdown.

Reserves of depository institutions Vault cash(5)
-------------------------------------- --------------------------------------
Reserve used to Net carryover
Date total(2) nonborrowed required Monetary balances total satisfy surplus(7) of reserve
base(3) with F.R. required balances(8)
Banks(4) reserves(6)
-------------------------------------------------------------------------------------------------------------------------------------------
July 42731 42469 41067 828452 8420 50206 34311 15896
Aug. 44621 43646 39799 829739 10983 51040 33637 17402
Sep. 42079 40513 40338 826415 8606 49628 33473 16155

Oct. 41476 41222 40026 828353 8264 49747 33212 16535
Nov. 41863 41497 40187 833075 8526 48985 33337 15649
Dec. 42710 27280 40967 836384 8188 52153 34522 17631
2 weeks ending(10)
2007-Nov. 21 40531 40007 39044 833688 7810 49711 32721 16990 74

Dec. 5 44359 44160 42536 835284 9478 48359 34881 13478 38
19 38676 34843 37507 831790 6610 52080 32066 20014 357

2008-Jan. 2 46731 11424 44349 842202 9493 53819 37238 16581 39
16p 39989 -1387 38278 833394 7949 51440 32040 19399 108
Click to expand...

The Bank of International Settlements recommends 8% reserve ratios. The average European bank has 18% reserves.

Borrowed reserves are from the Federal Reserve. Here are the average non-borrowed reserves for US banks by date:

Nov 21 - 4.8%=40007/833688
Dec 5 - 5.3%=44160/835284
Dec 19 - 4.2%=34843/831790
Jan 2 - 1.4%=11424/842202
Jan 16 - (.2%)=(1387)/833394

In addition, the required reserve ratios have been declining.

This is beyond insolvency. This is INSANE.
 
Can you explain what each of those rows/columns mean?

edit: n/m link says it all, but still don't know what it means! =P
 
Last edited:
wouldn't these totals always look like this after a rate cut?

not that I'm saying the fed is doing anyone any good, but id imagine if they're getting t bills flooding in that theyd need to start getting a return on the interest rates to pay back the fed in order to get back in the plus, and that would require the money getting loaned into the market?
 
Do they get charged a penalty for this, or do they have overdraft protection?
 
mczerone said:
But then how would bankers have any sort of advantage over the proles?
Click to expand...

The free market can sort that one out.

You can't loan money you do not have. Banks would get used to it quickly. They already require this thing called colaterol from their borrowers.
 
BarryDonegan said:
wouldn't these totals always look like this after a rate cut?

not that I'm saying the fed is doing anyone any good, but id imagine if they're getting t bills flooding in that theyd need to start getting a return on the interest rates to pay back the fed in order to get back in the plus, and that would require the money getting loaned into the market?
Click to expand...

No. The financial industry is hemorrhaging cash, at the bottom of the pyramid, at the rate of about $15B per week. This is insane. Look at the column 'non-borrowed reserves' on the three tables.

For example, under Historical data after 911 the non-borrowed reserves almost doubled to 2x the required ratio.

Look at it this way: If your bank collapses instead of getting 8% of your money bank or whatever the reserve ratio is instead you get back -.2% of your money; you owe your bank money (because the reserve ratio is negative). Of course, if the banking system collapses depositors aren't going to owe the banks money. But a negative reserve ratio is just INSANE. This is more insolvent than insolvent if that makes sense.
 
There is a rip in the space time fabric at the centre of their Vaults.

Imagine breaking into the big Vault and finding boxes of IOUs :D

well not so funny.
 
jonahtrainer said:
Check out this information I came across combing through the Federal Reserve reports looking for cues on why the meltdown.



The Bank of International Settlements recommends 8% reserve ratios. The average European bank has 18% reserves.

Borrowed reserves are from the Federal Reserve. Here are the average non-borrowed reserves for US banks by date:

Nov 21 - 4.8%=40007/833688
Dec 5 - 5.3%=44160/835284
Dec 19 - 4.2%=34843/831790
Jan 2 - 1.4%=11424/842202
Jan 16 - (.2%)=(1387)/833394

In addition, the required reserve ratios have been declining.

This is beyond insolvency. This is INSANE.
Click to expand...

isn't there a minimum ratio to be kept? how could they go to negative?!?
 
I'm just glad they are a privately owned entity or the United States would be broke. :D
 
I've been saying this for a couple months now. There are one or more major banks already insolvent. This data seems to confirm that. No, those banks that are insolvent should not be allowed to continue operations. But what did you expect? This whole system is like a shell game. They have you looking over *here*, just to hide what's over *there*. I see some other things happening that would point to this situation being the case. Jacking credit card interest rates in hopes that people will either pay off the debt or transfer it so that its no longer on their books. Making it a pain to withdraw money from any kind of deposit accounts. Its happening. And its sickening to think about.
 
2 stupid questions

1.) Nov 21 - 4.8%=40007/833688

negative on the left, positive on the right?

2.)

Why does the Fed even need reserves? Reserves of what? Paper? That nice lego movie about the Fed, though very informative, wasn't very accurate. This shit ain't even worth the paper it's printed on!!! It's all electronic. Sure, some people might say electrons are expensive. But I won't be buying the Fed's sales pitch in 10 years: "Buy a $$Dollar$$, it's worth 1/100000000000000th of an atom!"
 
cputter said:
2 stupid questions

1.) Nov 21 - 4.8%=40007/833688

negative on the left, positive on the right?

2.)

Why does the Fed even need reserves? Reserves of what? Paper? That nice lego movie about the Fed, though very informative, wasn't very accurate. This shit ain't even worth the paper it's printed on!!! It's all electronic. Sure, some people might say electrons are expensive. But I won't be buying the Fed's sales pitch in 10 years: "Buy a $$Dollar$$, it's worth 1/100000000000000th of an atom!"
Click to expand...

Reserves are for fractional reserver banking , meaning if a bank has $1 for example deposited in the federal reserve, the bank can loan out $10 if the reserve requirement is 10%.
 
In theory it means they have no actual cash on hand. A negative reserve occurs during a Run. People want to withdraw their money as cash, but the bank doesn't have any.

So really those numbers indicate all those banks are in Run conditions.
 
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