Spends $53 billion tuesday

This is the biggest event of the year and nobody is talking about it

Bump. Stop engaging with psyop fake story distraction threads and pay attention to the money user

Wake up goys

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>>transparency
>what's that?
For investors? Bitcoin.
>who isn't being RIP'd?
again BTC gains from this
they say the bank repo markets felt a crunch because low liquidity, the quarterly tax payments for corps coincided with a jap holiday so we had no cash coming from japan to the bond markets and and corporations withdrawing from banks at the same time but it needs 3 days of $ injections? Seems shady.
What I don't get is this is the fed's rate, don't they usually do minor repo rate adjustments different than this to keep it in the target range?
Are they trying to crash the economy and falshing warning signals? Or is this to weaken the dollar?

He said inflation was under the 2% target. He's just printing money to make that rise. No big deal.

can I get a QRD?
>t. brainlet

>real financial news about the biggest habbening since 2008 crisis
>not another shillpost about some shit crypto or buttcoin
Git da fuck ouddahere

How would someone get access to this money? 150B in 3 days I think is a new record

Fed dropped trow and launched diarhea dump into the pool that we're in :(

Large institutions keep their funds in treasuries and other secure debt products. Sometimes they need to convert these holdings to cash to make payments on whatever. They lend their securities to other entities overnight and agree to pay a bit extra when they buy them back the next day (the interest rate). If you're on the other end and you want to buy these securities, and you feel confident about the counterparty's ability to pay them back, you won't ask for much interest. If you don't really want them, or if you think the counterparty is going to default overnight or something like that, you'll demand a higher interest rate to make it worth your while.

In the past week this interest rate has briefly bspiked to literally its highest on record with no obvious reason, making it really expensive to lend money overnight this way. So instead of banks not lending to each other anymore and causing a liquidity crisis, the Fed is stepping in to guarantee that these trades will go through by acting as counterparty of last resort. They conducted a repo operation for $53b on Tuesday, more concerning is that they did one this morning allotting for $75b of repo but were asked for $80b meaning a bunch of entities were short $5b of funding today. They're doing the same thing tomorrow morning and if the operations keep getting oversubscribed it's a sign something is seriously wrong in the money markets.

I'm really into doom porn and hope the repo operation is oversubscribed by like $20b, if something like that happens the shit is absolutely going to hit the fan and it will be like 2008 all over again.

market-ticker.org/akcs-www?post=236872#discuss

It's reserved for banks and VC, hedge funds, usually owned by the banks for short term lending

thank you for this
Doesn't the fed usually play this role? or does the rate almost always fall in line with the feds target range? Is this just a bigger injection than usual or something done only when repo rates break out too much?

Just when I lose all hope that this place is just zoomers and shit memes, here comes user to drop some truth on homie. Thanks user

from that board
>Quote:
Who could the borrower(s) be that had to pay 10%? Would it not have to be entities that have access to the Repo market yet do not have access to the Fed? Do I even understand that much correctly?

No; while they could presumably go to the discount window doing THAT is a self-declaration of distress, which NOBODY wants to do (especially if it's someone like DoucheBank!)

What you're seeing is the perversity of the Fed's "excess reserve" nonsense. The Fed should NOT be paying anything on those deposits; they should be willing to hold them at a negative rate reflecting the cost of custody, but never, ever pay someone to leave them there.

The entire point of having the privilege of being a bank is that you lend out the funds you have in excess of your required reserves. The Repo market is a LENDING market; it is, at its core, about balancing reserve and transactional requirements on a short term basis (overnight to a few days.) If there is a shortage of funds in that market DUE TO THE CHOICES MADE BY LENDERS the Fed's job is NOT to step in -- their job in that situation is to BITCH SLAP the organizations involved.

but the fed is lowering the amount it pays on excess rates, right?
and doesn't the repo rates drag up the feds funds rate above their target.

Trump loves this shit, more inflation

Whats scary is you're not wrong. And this will go largely unnoticed on this Bavarian Zamboni Forum.
I work in Real Estate. I work closely with mortgage lenders. Shits fucked...
But what did you expect when you started giving loans to people who shouldn't get them. NINJA MY FRENS

So is this literally *the end* or another non-happening?

You tell me dicktard.
Banks aren't trusting each other to lend to one another overnight. Thus the spikes in interest rates.
Now banks aren't trusting each other so much that the gubment had to step in and guarantee it.
Yet when it came time to settle some of the banks were short.

Was that simple enough for you candy land?

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you know these amounts get repaid (with some interest) every morning right?

you read the thread right?

The problem is that this is the third day they have had to do this and if they have to do it Friday morning again, someone will have to do something ASAP. It's a structural crack in the system that is supposed to work but isn't. For now, it is isolated but if something else happens at the same time, shit could really go down.

yes and is the only guy who knows whats going on it seems, except he is overreacting to the situation, his info is basically correct. corporate taxes where owed and this with the huge amounts of bonds issued caused some liquidity issues for banks. Just bad timing if nothing else.

the banks are lending but they're also part owners of the corporations borrowing the funds, if I get it.
If the FED is rushing in now why don't the banks pull funding more often? Make the FED come in a save the day.

The whole system is based on trust, trust that banks can pay back the money they borrow. If they just wait for the fed to keep on paying the shortfall that trust could break down.

cashing out to buy sergeys 700k dumps

Everyone from corporations to world govts are increasing cash reserves, Google, berkshire hathaway, apple, amazon and now the banks and the US treasury under orders from Trump to fight chinese currency manipulation

Stop over reacting people and don't pay attention to the worlds elite hoarding so much cash it's causing liquidity shocks in debt markets

>If they just wait for the fed to keep on paying the shortfall that trust could break down.
in that case, it would be in there best interest to bend the feds trust but not break it. I was think the higher rates would motivate them but they let it get to 10% recently, so the market wasnt going to crrect itself quickly i guess

>nothing to see here goyim watch porn instead

Im not saying not to take note of the big picture, I enjoy my conspiracy theories as much as the next guy. BUT saying this is 2008 all over again is just plain retarded.

The banks do not want to borrow at such rates from other banks, and the fed does not want the banks not to be able to meet their obligations. high rates are not good. They try and keep them between 2.5% and 5%.

if someone would have told me toxic MBS would crash the worlds economy in 2007, I probably wouldn't have believed them.
larping like link holders have other assets to cash out, all LINK holders now are 100% in LINK Brian Jonestown Cryptocurrency

How many times do you have to read mortgage backed securities?

Taxes happen every year fucktard
Get out here with that shit

that's another thing, how come taxes never did this before to repo markets?
This could just be a hiccup and the crash doesn't come for another two or more years. It just looks bad when added up with everything else.
Trade wars, hyper inflation globally, interest rates at or near 0%, fed talking about negative rates could work in theory, debt markets over leveraged, hosing looks like it's peaking or plateauing, zombie companies in the US and China, national debts/GDP at ATH, auto's closing. Who is in good shape besides the major companies sitting on billions? Why are they sitting rather than investing or reinvesting the money? They're waiting for a better deal.

because it is a combination of things of which corporate tax being due is one, retard. God when someone with a sub 80 IQ replies on here it makes me wonder why I still sometimes visit this site.

Tax may have contributed but it never set it off before. Why wouldn't the banks pull money from their excess reserves at the fed and use that 2.5% to make the 5 or 7% in repo markets Why is the FED printing $ to do this? Is what I don't get.

Thanks for make biz a better place

>Fractional reserve banking is a system in which only a fraction of bank deposits are backed by actual cash on hand and available for withdrawal.
>The reserve requirement is the amount of funds a bank must have on hand each night. It is a percent of the bank's deposits.
OK, I guess.
>The overnight repo market is where banks loan cash to each other to ensure maintenance of these federally-mandated reserve requirements.
So banks pretend to meet the requirements with loans? Well as long as the sector as a whole has the cash in reserves, maybe that works?
>The FED has stepped in to allow banks to continue to pretend to meet federally-mandated reserve requirements.
Oh.

Checked
Niccccccccccccccceeee

Damn they could've given almost 500 usd to each US citizen with that.

also from that board
>Here are my predictions for everyone to see:
S&P 500 at 320, DOW at 2200, Gold $300/oz, and Corn $2/bu.
No sign that housing, equities, or farmland are in a bubble- Yellen 11/14/13
Trying to leave the Rat Race to the rats...
>2007

Banks should increase the interest rate paid on deposits if they need more cash.

That's anti-semitic

Federal reserve artificially limits rates on loans so theyd be losing money if they raised interest rates on savings on their own

it looks like they're just using one of the tools available to them to help meet their policy goal of maximum employment and stable prices

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But also do whatever is necessary to maintain this expansion

I'm going to go ahead and unironically take these posts seriously; everything is fine.

you do that. Never worry your head about how much money they print, it will all be fine. For BTC holders

zerohedge.com/markets/fed-begins-repo-operation-funding-rates-ease

basically, there's a bank somewhere with shortfall that was unable to find loans in the repo market. we don't know details about that. it's not unusual at all for banks to lend money to each to balance the books at the end of the day. there seems to be a trust issue for some reason though where the institution that's short isn't able to find loans in the normal repo market, so the fed stepped in to cover it. so they lent the 53B or whatever it was, then committed another $75B to ease the markets fears.
when banks become afraid to lend to each other, the whole repo market breaks down and shit hits the fan, so by stepping in and committing an excess of funds, the fed is trying to reinstill confidence. most of that money has not been spent and is not needed.

It's getting worse

it will get a lot worse if banks are on edge fearing another 2008. nobody wants to hold the hot potato. the whole system is built on trust. the lender has to trust that the recipient is able to repay the loan.

the balance sheet MUST continue to grow organically

They love to pump BTC at the FED

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Rolling for the collapse of the fiat ponzi

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What’s the chance it’s deutsche

It's the usual suspect.

Hey, you better watch it buddy. People with sub 80 IQ are people too and biz welcomes us. The smart ones figure out how to make it and they give us memes so we know how to follow. We makes the lols. $1 k eoy

Over 200B. 53 on Monday, 75 yesterday, and another 75 today.

Yesterday's offering was oversubscribed, meaning that total liquidity wasn't sufficient for all the borrowers, causing rates to still be elevated. Today's repo was EVEN MORE oversubscribed, and rates are still above the PREVIOUS Fed target range of 2.25%. They lowered it to 2% but the rates haven't even normalized into the previous range lol.

Fed has no choice but to keep up the QE (even though they would never call it QE), it's either that or let the overnight lending market collapse as companies trample over each other to not be one of the poor schmucks to be left insolvent.

This is just one of many indicators (like the yield curve) that often lags 6-18 months behind actual market contraction

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Brainlet here

Doesn't this pretty much guarantee a recession is coming within the next three to six months?

When I first read their tax payments excuse on Tuesday it immediately reminded me of the Chinese New Year meme that circulated when everyone was dumping their bags at the end of 2017 and early 2018.

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no, but it's unusual for the fed to have to get involved in the repo market. its a red flag for sure, but so long as they are able to hold confidence and extend the needed capital in the short term, we would hope the rest can work itself out. I don't know where the shortfall is coming from though.

> Credit markets are locking up.
Watch this if you want to know how this is going to turn out:
youtu.be/k9_bWbrYPKg
He talks a lot about the pension crisis but gives very good insights about when and how the credit markets will freeze up and bring on recession.

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Lol, an enthralling literary exposition, user.

Oh so this is an international market? I thot it was just US, if the Fed is pumping it.

If there really is a bank doing so poorly that no one will lend to them overnight for under 10% then perhaps they should reconsider their business model and keep more cash on hand or just go out of business already.

Ok big brain. If banks are increasing cash reserves why are they short on cash 3 nights in a row?

6-18 months?? Ok I'm not offloadingg my equities yet

That wasn't polite at all

Check it out brainlets. The liquidity operations began on Monday, right after the Yemeni/Iranian/whoever attack on Saudi oil refining facilities. The Saudis are now importing crude oil and other oil products and are supposedly bleeding $400 million / day.

The reason for the liquidity shortfall is likely related. Perhaps Saudi Aramco debt was being used as collateral. Their counterparty could have gotten spooked and demanded higher rates.

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If you're a trader at a bank, and you have a suspicion which bank is weak, the logical response would be to encourage your own bank to suck up as much of the liquidity the Fed is offering as possible (depriving the other bank of it) and then bet on their default using CDSs.

>the system is based on trust
>put jews in charge
Yikes.

This actually was my first thought when they printed the first money after the oilrig attacks in saudi arabia.

1. Be a stupid bank.
2. Gamble on BRENT and CRUDE with 30x leverage.
3. Suddenly black swan event with attack on oil production.
4. Get liquidated. Lose all the money.
5. Ask the FED to print some more play money.

... i mean the 15% gain on crude was the highest 1 day increase in oil ever. So there might be a couple of idiots getting liquidated by this. Especially since it looks very likely, that oil is going down forever because of the climate esotherics .

It's just the US. But a lot of these banks are siphoning money to Europe to sell the debt there because interest rates are higher in US

If a bank got BTFO trading like that, I wonder if they would need to file an 8K with the SEC. wonder what the deadline would be.

Spreading it out Trump is smart.....instead of one giant HIT

YW

Maybe the repo collateral was oil futures.

> 1-3/4
why not bushels, you fucking burgers

Bump

>$200 billion injection in 3 days
shit looks fucked

B-but tether

Based, please continue to drop truthbombs

So let me get this straight, the Fed just said Alakazam and created over 200 billion more freedom dollars in three days?

Lmao I don't want to hear any of you commies complaining about capitalism every again

No the duration had been one day only

I think you are repeating the narrative that they WANT us to believe

Lol the fed is a mess

Bunch of childish boomers

This is really all it everyone wants to sit in cash and let every one else blow up

It's like all of you losers waiting for the next recession so you can buy up RE and whatnot

The question is what does this all lead to? Devaluation? Inflation?

You don't want to be sitting in cash when inflation hits

It seems like deflation is the real hidden threat here.