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Jim Bianco Says This Is QE, Like Y2K

Jim Bianco Says This Is QE, Like Y2K

In contrast to Hussman, Jim Bianco, at Bianco Research says the Fed’s repo actions are QE. 

Earlier today I posted, Hussman Sides with Powell: It’s Not QE4.

If Hussman convinced you the Fed was not conducting QE, I will give you a chance to change your mind again.

“Not QE” Looks a Lot Like Y2K

This is a guest post by permission from Jim Bianco

Jim Bianco at Bianco Research says “Not QE” Looks a Lot Like Y2K

We would argue the special lending facility that started in late 1999 to support the feared Y2K computer glitch offers a historical analogy to the current period.

Stories 20 years ago sound like they are describing what is happening today:

Dow Jones News Service – (December 28, 1999) CASH IS FLOWING LIKE CHAMPAGNE FOR Y2K
The volume of cash that the Federal Reserve has temporarily given to banks to avert potential Year 2000 strains is rising to dizzying levels. Including nearly $20 billion it gave to the banking system in the form of term “repurchase” agreements Monday, the Fed has almost $100 billion in hard currency loans outstanding to banks. That’s the most money lent out through repurchase agreements ever, said Peter Bakstansky, spokesman for the New York Federal Reserve. For some perspective, the Fed had $23 billion in outstanding “repos” in December 1998, and around $9 billion in December 1997.

The Y2K special lending facility had a similar effect on the Fed’s balance sheet. It was also done for “plumbing reasons.”

And, as the [Champagne] story points out, the Fed supplied record amounts of repo never before seen at the time.

…click on the above link to read the rest of the article…

This Weekend Is Y2K for GPS Systems: Experts Warn the Grid, Finance, & Transportation Are at Risk

This Weekend Is Y2K for GPS Systems: Experts Warn the Grid, Finance, & Transportation Are at Risk

This weekend, on April 6th, we’re having another Y2K. This one is on GPS devices, as they roll over from “week 1024” to “week 1.”

  1. Best case? Nothing happens.
  2. Not so great case? If you have a Garmin or a TomTom on which you rely for navigating, you could run into trouble.
  3. Worst case? Some experts warn that the power grid, transportation, and the financial system could be affected.

What’s this all about?

First, here’s what’s going on.

The rollover issue itself is caused by the fact that GPS systems count weeks using a ten-bit parameter. This means they start counting at week zero and reset when they hit week 1,024. The first count (or “GPS epoch”) started on January 6th, 1980, and the first reset took place on August 21st, 1999. That means the next one is due April 6th this year. (source)

The good news is, devices have successfully been through an epoch before. The bad news is, some devices could go haywire and we’re way more tied into the GPS grid than we were when it happened in ’99.

What’s the worst case scenario?

Relax. I don’t think planes will begin crashing into the ocean.

But, if you have an older device and you haven’t been updating it, there is the possibility that the epoch could cause big problems.

When the rollover happens older devices may reset their date, potentially corrupting navigation data and throwing off location estimates. GPS relies on precise timing data to operate, and each nanosecond the clock is out, translates into a foot of location error.

 …click on the above link to read the rest of the article…

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