Repo Market’s Liquidity Woes

Dec.03 — In normal times, not even Wall Street pays much attention to market plumbing, but flare ups in the repo market could create tremors across the global banking system. December may see the same sort of chaos that struck this vital financial cog just two months ago. Bloomberg’s Dani Burger reports on “Bloomberg Daybreak: Europe.”

CNBC’s Ylan Mui and Steve Liesman report on an extension to the Fed’s overnight repo operations and T-bill purchases.

38 thoughts on “Repo Market’s Liquidity Woes”

  1. Just Call Me Bookworm

    Looks like the post-2007-8-crisis regulations are causing potentially major problems. I think the regulators ought to very urgently reconsider how tight the regulations are. With the regulations being the way they are, if the Fed doesn't make its repo window permanent, we could see another financial industry collapse, followed by the collapse of Main Street–which will ripple into European markets, too.

  2. That debt is not being bought back, that’s a lie. The fed has injected 3.5 trillion since sept 17. There has been virtually no reverse repos since this Ponzi scheme was kicked into hyper drive.

  3. Chinese banks failing for the first time in decades. Repo market having fits blowing up the lending rate. Global manufacturing PMI is down.
    Nope, no liquidity problems here. We printed 4 trillion, and we have liquidity problems. Job well done, FED. You've done it again.

  4. Here's an article from a reliable source (MarketWatch owned by Dow Jones owned by News Corp which also owns WSJ). https://www.marketwatch.com/story/the-repo-market-is-broken-and-fed-injections-are-not-a-lasting-solution-market-pros-warn-2019-12-04

    The Fed has injected around $323 billion to support the Repo market from Sep 17 to now. So, yeah, that's a lot of support in a market that usually runs on its own. Apparently banks rather park their excess reserve with the Fed, who then can inject that cash only if it assumes the counterparty risk to the borrower.

  5. The trust between Banks is GONE & for good reason. These Bail Outs that the Fed. shows to the Public is now $$$350 Billion per day. The graph should go vertical toward the end of Dec. The Fed. supplies $$$ to Banks World wide and a number of them are close to insolvent.

  6. Yep it’s nothing new. Move along people, ignore the fire behind me.

    She highlighted it’s only overnight. Does she even know new terms are now up to 42 days now. As the demand for overnight repos are diminishing. In another week or two, it’ll be 60 days and eventually days will become weeks cause they want you to believe the number on terms are not increasing as much. Ie. 42 days become 42 weeks. It’s the same payment, says the used car salesman. This is how Powell is planning to organically evolve the repo market into QE. We’ve had TARP in the 2000s, Twist and QE in 2008, this year is GARP. Government Assisted Repo Program. Over the course of decades since Nixon converted to Fiat Currency and bullied the Saudis and others to use USD as global trade currency, the USD index has gone up as high 160 as soon as the world submission was obtained. But always back to 98. This time, it may not hold at the constant 98 anymore, too much paper money.

  7. 300 to 350 bilion dayly for months bulshit dollars going down recession they cant stop no one can't stop it will and we have to start ower put banker's federal RESERVE BANKSTERS in jail all of them then reinstate new money sistem free market not the bulshit we have and get rid of us corporations call Gowenment we don't need the conartists they worthless and they don't work for us and one more thing IRS need to go to don't forget abou them to and I FORGOT almost CIA TO GOT TO GO plenty of jails to lock the district of Columbia criminals. Gobbles Americans

  8. I'm sorry but how much more can the Fed continue growing the balance sheet?

    There's no need for banks anymore if the Fed is just handing out free money ad infinitum.

  9. come on.
    stop the lies.

    The FED is monetizing Trump's debt.
    There is so much of it, the primary dealers can't unload it and they are forced to buy it but they have bills.
    They can't just dump those treasuries to the "highest" bidder, inflation would kill us all.

    So, the FED steps in and monetizes the debt.

  10. Education 101 – The FED is the Federal Reserve of NY it is a private company owns by the shareholders.
    As of 2018 FED NY has 12 Billion in the capital and 2,2 Trillion in total Assets and Liabilities:
    This is a one-day operation of the FED REPO: 11-7-2019: Value in BILLION.
    Collateral Type Submitted Accepted
    Treasury 71.342 71.342
    Mortgage-backed 8.800 8.800
    Total 80.142 80.142

    The FED does not have the capital to inject 100 Billion into the REPO market.
    But it has injected Trillions into the market since September 2019.
    The FED can not borrow money from anyone. The Buck stops here.
    Where is the new money come from? All US Treasury have been allocated.
    Can this Bank issue new Treasuries as it sees fit?
    The US debt is at least 71 Trillion that we know of. You can forget about 22 Trillion.
    The housing market of the US is about 9 Trillion.
    These numbers are from The FED Daily REPO.

  11. The Green Cross of America, aka Federal Reserve has extended the amount from $75B to $125B per day to the Bank Repo Market & extended it to Nov. 4 in the hopes that the “green blood” being injected will help banks remain liquid, meaning having cash on hand to maintain daily operations. The question is where is the open wound that is causing the bleeding of cash?

    Recently the U.S. Corporate government (via the Act of 1871 of Congress, Federal Reserve Act of 1913 and Emergency Banking Act of 1933 but not by the people) must make international payments on loans that were due on September 30 (and was extended up to October 17) and there is speculation that a default in payment will be the start of the bankruptcy of the U.S. Corporate government (see link below) leading to a financial/economic upheaval with Pres. Trump bringing the dollar back on a "gold" standard.

    The Trade War was a smoke screen to try and renegotiate in paying off the debt but seem to prove to be going nowhere which is why Pres. Trump is once again starting his rhetoric against the Federal Reserve being the enemy of the people to set the stage when the bankruptcy happens.

    Take note that all Federal taxes are now to paid to the U.S. Treasury and no longer to the Internal Revenue Service. The IRS was formed in 1862 to fund the Civil War and it was repealed by Congress seven years later. But in the same year as the Federal Reserve Act of 1913, this was again resurrected as a 16th amendment to the Constitution, giving the Federal Reserve an agency to collect its money from the citizens.

    However, Federal Reserve Act of 1913 was only valid for a 100 years and the authority expired on December 2012 when it was not renewed. Thus, the Federal Reserve no longer has the authority to print money thereafter.

    This may be the reason why it is digging into its reserves of $1.7 trillion to save the Bank Repurchase Market for overnight loans. Otherwise, we would already have seen a repeat of 2008 and another Quantitative Easing with additional printing of the dollar.' The final question left is will the “green blood” be enough to keep the patient from dying.

    link: The United States isn't a Country, it's a Corporation.

    http://www.serendipity.li/jsmill/us_corporation.htm

  12. FED now accepting hand written notes and scout's honor promising to pay back $120 billion overnight loans that don't have to paid back for 2 weeks (or until CEO runs with the money).

  13. I am utterly convinced you are paid to be stupid. Erpa durp I dont know why this and durrr err umm I dont know why they did that? And your meant to be the experts? Yeah right. Anyone with half a brain cell can see this crock of poop for what it is yet you pedal the mainstream narrative.

  14. So the Fed is buying the U.S? That's not good. Think this was planned for the Fed to take over? Evil comes to mind.

  15. You would have to be a moron to have your money in stocks. I doubt there are many morons. Therefore, the FED must be buying stocks.

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