collateral bottleneck

The Spread of Collateral, Credit, and Spreads

By |2019-10-23T18:28:15-05:00October 23rd, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

When we talk about money dealers (not just primary dealers) and liquidity, we aren’t just zeroing in on the repo market. Money market conditions such as what we can observe in the part of the global repo market that ends up hitting the tape can be helpful in assessing overall liquidity. It isn’t, however, the [...]

August TIC: Trying To Get Collateral Out of the Shadows

By |2019-10-21T18:08:31-05:00October 21st, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The second most frustrating aspect of trying to analyze global shadow money is how the term “shadow” really applies in this case. It’s not really because banks are being sneaky, desperately maintaining their cover for any number of illicit activities they are regularly accused of undertaking. The money stays in the shadows for the simple [...]

Multipliers and Elasticity: The Other More Consequential Side of Repo

By |2019-10-01T18:12:32-05:00October 1st, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There is increasing skepticism in the mainstream media as to the functions and declarations coming from the Federal Reserve. As a direct consequence of the mid-September repo rumble, for the first maybe ever official opinions and explanations aren’t being taken immediately at face value. That may end up being the lasting legacy of what was [...]

Nice Work

By |2019-09-18T17:01:42-05:00September 18th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

According to DTCC's repo #s, there's a good chance fed funds was outside the range today, too. It was put at 3% this afternoon despite this morning's FRBNY operation, which is still higher than Monday when EFF sat right at the upper bound.  https://twitter.com/JeffSnider_AIP/status/1174425376048787457 In case it wasn't clear, I was being sarcastic in the [...]

China Repo: Vulnerability or Bottleneck, Risk Aversion and Collateral

By |2019-08-12T16:41:07-05:00August 12th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Toward the end of June, Chinese RMB money markets seemed like they had weathered the worst of it. One month earlier, in late May, regulators had seized Baoshang Bank Co. sending waves of uncertainty rippling through markets in China and around the world. Authorities were quick to declare “nothing to see here”, blaming the bank’s [...]

Ticked About TIC: The Accidental Discovery of Perhaps The Big Bottleneck

By |2019-07-17T15:30:38-05:00July 17th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

From October 2000 to July 2001, the Treasury Department conducted a special survey of users of its Treasury International Capital (TIC) data. Nearly two decades ago, it had become apparent (to some) just how important international dollar flows were to the overall economic and financial landscape. And not just those of the United States. TIC [...]

Baoshang Isn’t China’s Lehman, So Why Does April 17 Show Up All Over Global Markets?

By |2019-06-24T16:27:12-05:00June 24th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

One month ago, on May 24, Chinese regulators stunned the world by announcing the first bank restructuring in modern China’s history. Based in Inner Mongolia, Baoshang Bank was seized because of what the PBOC and China Banking and Insurance Regulatory Commission said was “severe credit risk.” Initial reports attempted to link Baoshang’s struggles to financier [...]

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