Can someone explain what does this article mean? My understanding about repo is that it is a very short-term debt market. What has it to do with 10year treasury bonds which is long-term debt?
Good read. Let's hope it's true - must admit none of us expected a pull back this deep (NDX/Growth) and nor do we expect it to last. But it's looking like it could get spicy!
You pledge collateral, often 10 year treasuries, to the repo market. So it's overnight borrowing against a much longer term security.
Research "US Treasury Basis Spread Trade". https://www.cmegroup.com/education/...ging-repo-exposure-in-the-treasury-basis.html