Can someone explain wtf repo rate thing is about and whether it even matters for us?

Discussion in 'Trading' started by lentus, Sep 18, 2019.

  1. lentus

    lentus

    thanks.
     
  2. Bum

    Bum

  3. lentus

    lentus

  4. tiddlywinks

    tiddlywinks

    I would say(guess), oil play(ed)(s) a big part in the recent situation, NOT similar to 2008.
    It does however spotlight the ongoing shortage of USD.

    Next.
     
  5. lentus

    lentus


    1. what does oil have to do with it?
    2. why is there a shortage of USD?
     
  6. lentus

    lentus

    I just heard that something similar happened in 08... tremor in the system?
     
  7. TommyR

    TommyR

    do the federal reserve use reverse repo to set short term interest rates?
     
    Last edited: Sep 18, 2019
  8. tiddlywinks

    tiddlywinks

    To reiterate, my guess that the Saudi pipeline explosion play(ed)(s) a part is just that... a guess.

    Repo activity can involve certain corporate bonds in addition to certain other non-government based assets. As such, it is POSSIBLE "borrower(s)" needed to convert those type assets into short-term cash (while maintaining all other monetary metrics and regulations).

    Unrelated to oil, there is now talk that the September 15 corporate tax deadline drained liquidity(cash) from the system.

    Because worldwide the USD is being sought. Positive interest rates are but only one reason.
     
  9. Specterx

    Specterx

    There are a few authors/commentators who make a career of posting about obscure swap rates, Eurodollar "funding shortages" and similar themes, on Zerohedge and like-minded sites - usually with sinister undertones that the market is about to collapse, or some vague but serious crisis is about to explode. After all, we saw overnight funding stress in 2008 and you know what happened then...

    My advice is to ignore all this as it's mostly just noise. If there is something serious going on, you'll know about it.
     
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  10. bone

    bone

    Truthbomb. At least 60 percent of worldwide transactions are in US Dollars.

    You want the Fed injecting short term repo liquidity because you don't want a pre-2008 scenario where China was buying all the T-Bills and banks were using mortgage instruments for collateral because they couldn't find any T-Bills on the secondary market.
     
    #10     Sep 18, 2019
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