Federal Reserve to inject almost a trillion in liquidity into the repo market

They are getting as much cash as they can.
then they will RUN! with the cash.

they know trump is going to get them soon...

Thanks Obama.

a reply to: buddha

😂😂😂😂

Trump just gave them a trillion dollars in tax cuts, he doesn't give a damn about putting them in jail.

originally posted by: ABNARTY
a reply to: toysforadults
Shoot...and here I thought I had a pretty good handle on market finances. I guess not.
I have no idea how any of what you posted works.

the Fed itself is reportedly awash in $4 Trillion of bogus paper derivatives from the 2007-2009 great recession …. which they are going to try and //unload// on the economy
mostly housing paper that the Fed wants to re-coup at the price they paid the banks for the bad-paper @ 100 cents on-the-dollar (since valued @ around 20 cents-on-the-dollar...) real Value ???

MaN you are on it lately, I really appreciate you keeping us abreast of these occurrences. Please make lots of money in the process and buy some of that gold out of the vaults of the rulers. Once citizens start taking back all the gold we will begin to have power over them again.

Can't be rich and powerful if us proles decide we don't need their vaults or fractional reserve system.

a reply to: St Udio

the Fed itself is reportedly awash in $4 Trillion of bogus paper derivatives from the 2007-2009 great recession …. which they are going to try and //unload// on the economy

But the Fed said they are no longer reducing their balance sheet, which to me means they will keep that $4 Trillion on the books (and likely begin to grow their balance sheet once things start cracking more)

a reply to: toysforadults

My understanding is that in nominal value, there will be about $1 trillion that is going into these repurchase agreements between last Tuesday (9/17) and October 10, however the institutions that are receiving this support are supposed to be paying back these short-term loans, so it shouldn't actually be $1 trillion coming out the back end of the NY Fed...

a reply to: FamCore

Technically yes you are correct. It's an overnight loan. They are doing this to keep interest rates on these loans low because funds were drying up.

a reply to: toysforadults

I appreciate it but no worries. It forced me to go do my homework.

At least I have a grip on the repurchase process. While I cannot pretend to be an expert on the matter, at least I can keep up sort-of.

a reply to: St Udio

Now I am confused again

These are flash cash loans that have to be paid back the next day.
All of the banks with adequate reserves that could loan the money overnight would lose money doing so.
The healthy banks raised billions of dollars worth of cash assets by issuing CD's that they will pay over 3% on through 2020.
So maybe there are some banks that need stress testing or portfolio modifications or maybe this is nothing..

originally posted by: ABNARTY
a reply to: toysforadults

Shoot...and here I thought I had a pretty good handle on market finances. I guess not.

I have no idea how any of what you posted works.

I have a very good handle on this and I submit that this is topic - repo market - is the first sign of our next legit bear market and liquidity freeze.

Basically, banks lens to each other overnight taking on assets and charging very little for their cash. This is normal. Nothing to worry about with that. But...

My hypothesis is banks are playing the treasury market since they can’t have a prop desk post 2008. Loan growth is slowing and thanks to low interest rates the loans they do make aren’t terribly profitable.

Banks then decided to make big bets on treasuries from a price standpoint to front run the fed. Cash spent, treasuries propped up, but now they’re out of liquidity - insert fed.

Repo market liquidity is the next big thing that no one is paying close attention to.

a reply to: EnigmaChaser

I appreciate the feedback.

Banks then decided to make big bets on treasuries from a price standpoint to front run the fed. Cash spent, treasuries propped up, but now they’re out of liquidity - insert fed.

I guess I am just an economic bumpkin. No clue what this means. Front run the Fed? Not saying you don't have a handle on this, it's just you would have to back up some before I got any traction on the subject. Not saying you have to either. Thanks for the attempt.