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quote:
the Fed’s reverse repo facility does little to alleviate the UST scarcity induced by the Federal Reserves’ QE programs coupled with a declining government deficit." The end result, they note, is "higher susceptibility of the repo market to collateral shortages" and thus dramatically higher financial fragility - the opposite of what the Fed 'hopes' for.
.... The spike in "fails to deliver" highlights a major growing problem in the repo markets that provide that leverage... and thus the glue that holds stock markets together.
It's wasted effort in this forum. Most don't understand these types finances and what they can do to our economy.
Maybe so, but I think there are at least a few who understand the importance of repo. If not they need to go back and study the recent popping. I am sure the IMF can help save the day though.
tidbit here.
quote: reverse repos have the potential to alleviate UST collateral scarcity but not agency collateral scarcity. Admittedly substitutability within the broader government collateral universe should reduce the importance of this last argument.
.... Via its reverse repo facility, the Fed is effectively facilitating the withdrawal of broker dealers from repo markets.
People should understand, this is a big deal. A repo run is what triggered the popping of the recent RE bubble. If one wants to read more about that, these 2 links offer some important and detailed information on that. There are also some FOMC transcripts that are also very insightful. Even if one only skims these. they are worth the read imo. Repo encompasses both banking and shadow banking; it's huge. The earlier links I posted in the OP also have information on this trend.
People should understand, this is a big deal. A repo run is what triggered the popping of the recent RE bubble. If one wants to read more about that, these 2 links offer some important and detailed information on that. There are also some FOMC transcripts that are also very insightful. Even if one only skims these. they are worth the read imo. Repo encompasses both banking and shadow banking; it's huge. The earlier links I posted in the OP also have information on this trend.
Even in the corporate world, the lack of liquidity is a death penalty. That's why corporations hoard cash.
Profits drop at Family Dollar amid takeover attempt
Poor Family Dollar has no cash (no liquidity) so they'll most likely be taken over. If profits are dropping, it could be that Family Dollar is taking would-be profits and using it to buy back their own stock in an attempt to block the take-over.
For financial institutions, it's much more severe.
This is one reason Conservatives oppose regulation. Free Markets require voluntary consumer transactions. The second you start coercing consumers to engage in involuntary transactions against their will (or that violate Common Sense), this is what happens.
The more esoteric and arcane the area being regulated, the more vulnerable it is.
Think software and hackers.
Software is to regulations as hackers are to finance and accounting wizards.
Why do Structured Investment Vehicles and Collateralized Debt Obligations exist in the first place?
Because for every action there is a reaction. In this instance, the action was the Clinton Administration's idiotic regulations and the reaction was the creation of SIVs and CDOs to mitigate the damage caused by the Clinton Administration's idiotic regulations.
Triggering...
Even in the corporate world, the lack of liquidity is a death penalty. That's why corporations hoard cash.
Profits drop at Family Dollar amid takeover attempt
Poor Family Dollar has no cash (no liquidity) so they'll most likely be taken over. If profits are dropping, it could be that Family Dollar is taking would-be profits and using it to buy back their own stock in an attempt to block the take-over.
For financial institutions, it's much more severe.
This is one reason Conservatives oppose regulation. Free Markets require voluntary consumer transactions. The second you start coercing consumers to engage in involuntary transactions against their will (or that violate Common Sense), this is what happens.
The more esoteric and arcane the area being regulated, the more vulnerable it is.
Think software and hackers.
Software is to regulations as hackers are to finance and accounting wizards.
Why do Structured Investment Vehicles and Collateralized Debt Obligations exist in the first place?
Because for every action there is a reaction. In this instance, the action was the Clinton Administration's idiotic regulations and the reaction was the creation of SIVs and CDOs to mitigate the damage caused by the Clinton Administration's idiotic regulations.
Triggering...
Mircea
The quick-sand analogy is a good one. The giant debt bog mires everything. Previously there was some sound footing beneath the bubble, not these days. Certainly action and reaction always apply.
The 80s really opened the casino with the credit bubble, largely. The nineties, they went all out and laid the ground work to offshore it all and shift the markets for maximum leverage. Then from about 2000 on they offshored and began to gamble in a big way.
All roads appear to be headed toward the Penthouse, regardless.
Here is the transcripts link for the FOMC, for those who are curious. I do hope people are paying attention.
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