Goodbye Eurodollars (thanks Libor manipulators/cheaters) hello Broad Treasuries Repo Financing Rate

Discussion in 'Financial Futures' started by bathrobe, Aug 7, 2017.

  1. bathrobe

    bathrobe

    This will take a while but the libor scandal has sadly made it so the most liquid contract in the world will be no more. I used to trade GE daily and then moved on to other contracts when it became utter crap. I don't see it recovering sadly. The new contract is being developed and will be available on the CME early 2018.

    http://www.automatedtrader.net/news...ures-and-options-on-the-replacement-for-libor

    http://www.automatedtrader.net/news/at/157741/us-chooses-treasury-repo-rate-to-replace-libor

    I am very sad, I love the GE and GE spreads.
     
  2. It's not quite clear that GE contracts will be going away... There will be much brouhaha well before that happens.
     
    bone, i960 and bathrobe like this.
  3. i960

    i960

    Until the "no more LIBOR thing" becomes actually real I'll believe it when I see it.
     
  4. bone

    bone ET Sponsor

    I just can't picture LIBOR being replaced any time soon as a benchmark - everybody and everyone in the world uses it as a reference point for financing and credit.

    It's the juice that gets quoted on LIBOR that makes life spicy. I guess EONIA and REPO might be alternatives, who knows...
     
    bathrobe likes this.
  5. DeltaRisk

    DeltaRisk

    Repo ironically, would be the easiest to manipulate.
     
  6. That's incorrect...
     
  7. bone

    bone ET Sponsor

  8. DeltaRisk

    DeltaRisk

    Are you sure?

    PD's are all over Repo.
     
  9. Yes, I'm sure... The repo mkt is an active and liquid one and rates based on actual transactions will be much harder to manipulate.
     
  10. Repo trades come in all shapes and sizes... The money mkt fund industry is one of the biggest users of repo, especially after the reform took effect.

    Point is that, unlike other rates, there are actual trades and there are lots of them. By definition, this makes the rates obtained from the repo mkt better than LIBOR (no transactions, just arbitrary estimates) and FedFunds/OBFR (too few transactions).

    I have no idea why I would scream anything.

    And it's just BONY now, btw. JP is out of the repo clearing biz.
     
    #10     Oct 4, 2017