Repo Market

GoldCore's picture

Global Bond Markets: Where Did All the Liquidity Go?

The world is awash with debt. With central banks increasing their balance sheets through quantitative easing, simultaneously pushing down interest rates and taking huge chunks of the market out of circulation, investors have had to stray beyond developed market government bonds in search of yield.

Tyler Durden's picture

What A Negative Swap Spread Really Means (Spoiler Alert: Nothing Good)

Swap spreads recently took a nosedive and are once again trading at negative levels, even for shorter maturities. This market perversion suggest that Wall Street is a safer counterpart than the very institution that underwrites the whole fractional reserve fraud in the first place. To price in a higher risk premium on the US government than on US banks is a contradiction in terms so there need to be another explanation behind this puzzling market phenomenon... There is, and you're not going to like it.

Tyler Durden's picture

Overstock Holds 3 Months Of Food, $10 Million In Gold For Employees In Preparation For The Next Collapse

"What do we do as a business so that we would be prepared when the next crash happens. One thing that we do that is fairly unique: we have about $10 million in gold, mostly the small button-sized coins, that we keep outside of the banking system. We expect that when there is a financial crisis there will be a banking holiday. I don't know if it will be 2 days, or 2 weeks, or 2 months. We also happen to have three months of food supply for every employee that we can live on."

Tyler Durden's picture

Bernanke Says Economy Needs To Crash Periodically So We Can Be Sure We're Pushing It Hard Enough

"My mentor, Dale Jorgenson [of Harvard], used to say — and Larry Summers used to say this, too — that, ‘If you never miss a plane, you’re spending too much time in airports.’ If you absolutely rule out any possibility of any kind of financial crisis, then probably you’re reducing risk too much, in terms of the growth and innovation in the economy.”

Tyler Durden's picture

Peak Debt, Peak Doubt, & Peak Double-Down

Investors are too complacent (the Minsky-Moment).  Too many are still trying to profit from the Fed subsidy of past stimulus. Investors remain loaded in risk assets, incentivized by the need to beat peers and benchmarks and comforted into complacency by the Fed ‘put’. The true level of risk is being ignored. The pervasive mentality of seeking maximum risk has become a terrible risk/reward trade for two main reasons...

Tyler Durden's picture

A Desperate Sweden Looks To "Fix" Broken QE With Massive Muni Monetizing Madness

Way back in June we documented the “curious” case of Sweden’s broken QE and when we used the term “broken”, we didn’t just mean that inflation expectations weren’t moving higher. We meant that bond yields were rising as the adverse impact from the illiquidity "premium" surpassed the price appreciation benefit from frontrun central bank buying. Fast forward three months and Sweden looks set to “solve” the broken QE problem and by extension ensure it can stay in the currency war games by expanding the list of eligible assets to muni bonds.

Tyler Durden's picture

Short Squeeze, Liquidity, Margin Debt & Deflation

Some things you CAN see coming, in life and certainly in finance. Quite a few things, actually. Once you understand we’re on a long term downward path, also both in life and in finance, and you’re not exclusively looking at short term gains, it all sort of falls into place. Of course, the entire global economy has been hanging together with strands of duct tape for decades now, but hey, it looks good as long as you don’t take a peek behind the facade, right?

Tyler Durden's picture

Asian Equities Tumble On Commodity Fears; US Futures Rebound After India "Unexpectedly" Eases More Than Expected

It was a tale of two markets overnight: Asia first - where all commodity hell broke loose - and then Europe (and the US), where central banks did everything they could to stabilize the already terrible sentiment.

Tyler Durden's picture

Foreign Central Bank Buying Jumps In Blistering 5 Year Auction

After yesterday's unexpectedly strong 2 Year auction, and coupled with the latest market selloff, there were few dark skies ahead of today's auction of $35 billion in 5 Year paper. Furthermore, suggesting today's auction would be very strong was today's repo market which saw the 5Y trading special at -0.15% on the curve, just begging for a short squeeze into the auction. That is precisely what happened.

Tyler Durden's picture

Demand Surges Into 10 Year Treasury Auction As Shorts Squeezed Again

The short squeeze into 10Y auctions never fails.

Tyler Durden's picture

Unmasking Of "Mystery Treasury Buyer" Has No Impact On "Uneventful" 3 Year Auction

The internals of the auction were solid if not groundbreaking: the Bid to Cover was 3.233, fractionally below the TTM average of 3.286, the Dealer take down of 41% was the highest since February, while Indirects ended up withe 51% of the takedown, above the 45.7% TTM average. Finally, Directs were awarded just 8.0% of the auction matching the lowest since February. In short: a perfectly average auction, one which did not attract particular attention for any one reason. Which is why, tomorrow's 10Y auction will be far more closely watched.

Tyler Durden's picture

Guest Post: Stanley Fischer Speaks - More Drivel From A Dangerous Academic Fool

With every passing week that money markets rates remain pinned to the zero bound by the Fed, the magnitude of the financial catastrophe hurtling toward main street America intensifies. When the next financial bubble crashes it can only be hoped that this time the people will grab their torches and pitchforks. Stanley Fischer ought to be among the first tarred and feathered for the calamity that he has so arrogantly helped enable.

Tyler Durden's picture

What Is The Reason For Today's Stunning Plunge In 2 Year Repo Rates?

What is going on here: is it just more seller than buyers, who are frontrunning an epic curve flattening or even inversion as may well happen once the Fed launches its rate hiking cycle? Or is something else happening behind the scenes. We ask because in addition to the normal selloff in cash and derivative products, something far more dramatic took place in the repo market where the repo rate on the 2Y just suddenly plunged out of nowhere.

Tyler Durden's picture

Gold And The Silver Stand-Off: Is The Selling Of Paper Gold And Silver Finally Ending?

In a January 2013 report “Report of the Working Group to Study the Issues Related to Gold Imports and Gold Loans by NBFCs”, the Reserve Bank of India estimated that the ratio of paper gold trading to physical gold trading is 92:1. That is a lot of unbacked paper gold instruments. This has almost entirely separated the “gold price”, such as it is (the clearing price for vast volumes of paper gold “representations” with a fractional backing) from the fundamental supply and demand dynamics for actual physical gold bullion.

As Mr L. famously quipped. "Ever get the feeling you’ve been cheated?"

Tyler Durden's picture

With Sweden's QE Officially Broken, The Riksbank Doubles Down: Lowers Rates Even More Negative; Boosts QE

Overnight the Riksbank confirmed that it neither learns from its own mistakes, nor reads BIS reports when at 9:30 CET, it shocked central bank watcher all of whom were expecting no rate change from the bank, and announced it is not only engaging in yet another rate cut, taking the key rate even further into record NIRP territory, from -0.25% to -0.35% but adding insult to broken QE injury, it would expand its QE by a further SEK 45 billion starting in September. The reason? Sweden is realizing it is losing the currency war (to a great extent due to its failed QE which is pushing bond yields higher and with it, its currency) and it needs to soak up even more collateral... which can barely be found.

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