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Bond Anxiety in $1.6 Trillion Repo Market as Failures Soar

 
Uncle Fuck Stick
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07/07/2014 10:05 PM

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Bond Anxiety in $1.6 Trillion Repo Market as Failures Soar
[link to mobile.bloomberg.com]
In the relative calm that is the market for U.S. Treasuries, a sense of unease over a vital cog in the financial system’s plumbing is beginning to rise.

The Federal Reserve’s bond purchases combined with demand from banks to meet tightened regulatory requirements is making it harder for traders to easily borrow and lend certain desired securities in the $1.6 trillion-a-day market for repurchase agreements. That’s causing such trades to go uncompleted at some of the highest rates since the financial crisis.

Disruptions in so-called repos, which Wall Street’s biggest banks rely on for their day-to-day financing needs, are another unintended consequence of extraordinary central-bank policies that pulled the economy out of the worst financial crisis since the Great Depression. They also belie the stability projected by bond yields at about record lows.

“You have a little bit of a perfect storm here,” said Stanley Sun, a New York-based interest-rate strategist at Nomura Holdings Inc., one of the 22 primary dealers that bid at Treasury auctions, in a telephone interview June 30.

Smoothly functioning repo trading is vital to the health of markets. The fall of Bear Stearns Cos., which was taken over by JPMorgan Chase & Co. in 2008 after an emergency bailout orchestrated by the Fed, and the collapse of Lehman Brothers Holdings Inc., whose bankruptcy in September of that year plunged markets into a crisis, were hastened after they lost access to such financing.

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07/07/2014 10:07 PM

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Re: Bond Anxiety in $1.6 Trillion Repo Market as Failures Soar
bumpbump
Silverback

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07/07/2014 10:10 PM
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Re: Bond Anxiety in $1.6 Trillion Repo Market as Failures Soar
bump
imjustsayin

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07/07/2014 10:35 PM

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Re: Bond Anxiety in $1.6 Trillion Repo Market as Failures Soar
Bump...hope some of the finance people give an opinion. This is a.mess. the fed owns fannie Freddie and ginnie...I understand the need to have mortgage backed securities that are stable....but you can't do business with peeps who don't have money. This sounds like the beginning of the end for the housing market...again....
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Uncle Fuck Stick (OP)
WAKE THE FUCK UP !!!!!!!!

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07/08/2014 04:10 PM

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Re: Bond Anxiety in $1.6 Trillion Repo Market as Failures Soar
Bump...hope some of the finance people give an opinion. This is a.mess. the fed owns fannie Freddie and ginnie...I understand the need to have mortgage backed securities that are stable....but you can't do business with peeps who don't have money. This sounds like the beginning of the end for the housing market...again....
 Quoting: imjustsayin


Yup...the only thing keeping this ponzi scheme going is "positive speculation"

And that is starting to unravel

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