WEEKLY FED BALANCE SHEET REVIEW. TRADING RANGE, ANYONE?
. Federal Reserve: "Factors Affecting Reserve Balances", October 3

- Fed's Treasuries holdings: $786.3bn (+$2.7bn)
- Other central banks' Treasuries holdings: $1,214.1bn (-$0.7bn) (*)
- Other central banks' agency securities: $784.3 (+$3.9bn) (*)
- Global Dollar Liquidity Measure: $2,784.7bn (+$5.8bn)

(*) Off-balance-sheet items
agustin_mackinlay@yahoo.com
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The week ends with a modest (+$5.8bn) increase in our Global Dollar Liquidity measure. The annual rate of growth rose half a percentage point to 14.1%. The message I take away from October's first weekly Fed balance sheet is that the global economy continues to act as an ... oasis of prosperity. Custody holdings are back at +19%, a bullish sign. However, comparisons will only get tougher as 2008 approaches: the same applies to credit spreads and to our models for risky assets (and to corporate profits for that matter). The truth is that, for all the brouhaha surrounding the credit squeeze, the S&P500 is back to its mid-July level. Trading range, anyone?