New fear among the banks? The next crisis has started.
Oh wow this is awesome, I’m so excited, by the way how long will this crisis actually last since it has already started? Days, months, years, decades?, or the proverbial “you’ll “know” when it ends”? Or is this a lifetime crisis? Possibly?...
Someone please let us know when this crisis has passed us, so at least maybe we can get something to eat or somethin...
@MsMorrisine said:
I would say the cash crunch has the true fault of the people needing the cash.
perhaps the """permanent""" fix rests with the firms not getting themselves in that position again.
@derryb said:
Individuals don't need cash, they have credit cards. Maybe those people are hoarding cash out of fear.
While those looking to make new trades could just not make them, this is not sufficient.
I get to say that I think I'm wrong and ZH has a point to make.
more to follow.
I change my mind.
they should not have loaded their balance sheets to the point of needing a fed intervention.
from ZH:
For those still unfamiliar with the core reasons behind the coming dollar shortage, BofA recaps the converging
sources of pressure that will likely result in secured funding markets breaking higher, including
elevated UST supply, bloated dealer balance sheets and year-end regulatory constraints, and
a banking system near reserve scarcity.
In a speech Monday morning in New York, Williams, who oversees the district’s pivotal trading desk, said issues has been expected in the repo market due to a confluence of factors that would sap liquidity, including corporate tax payments and settlement of Treasury auctions.
Fed officials responded with a series of operations that injected funds into capital markets, and on Friday announced that the program would continue through Oct. 10. The Fed also announced a 25 basis point cut in the funds rate Wednesday along with a 30 basis point reduction in the interest on excess bank reserves.
Where'd the Fed get all that money? Easy peasy - tap, tap, tap - poof! There ya go - no problemo!
In 2018, the New York Fed introduced a replacement, called the Secured Overnight Financing Rate, whose implementation is ongoing.
However, Williams said too many banks either are ignoring the transition or hoping LIBOR is extended. Williams said both approaches are dangerous.
“Implementation will be complex: financial contracts need to be scrutinized, operations need to be evaluated, and technology needs to be updated,” he said. “The work involves numerous jurisdictions and multiple asset classes, and will require changes from how business is conducted to how systems are built. These things take time, and time is running out.”
Banks should be working to discover where their LIBOR exposure lies and continuing to work towards the transition, Williams added, noting that contracts referencing U.S. dollar LIBOR transactions have a notional value of $200 trillion.
No manipulation there. Nothing to see. What could possibly go wrong? $200 trillion in contracts that all have to be re-done? Why is LIBOR on the way out? Who's going to be left holding the bag? Small local banks? Regional banks?
Q: Are You Printing Money? Bernanke: Not Literally
tap tap tap yes and no
if they don't have it on account then they would, most of the repos are overnight. they potentially only need to tap tap tap once for them.
but this is not QE. the money comes back the next day plus a little interest, too.
"The New York Federal Reserve Bank on Tuesday stepped into financial markets for the first time in more than a decade to keep interest rates in line with the Fed's target. The New York Fed said the $75 billion in repurchase agreements -- known as "repos" -- were made "in order to help maintain the federal funds rate within the target range of 2 to 2-1/4 percent."
Last time FED stepped in (with money) was more than ten years ago. Qualifies as out of the ordinary.
Keep an open mind, or get financially repressed -Zoltan Pozsar
"The New York Federal Reserve Bank on Tuesday stepped into financial markets for the first time in more than a decade to keep interest rates in line with the Fed's target. The New York Fed said the $75 billion in repurchase agreements -- known as "repos" -- were made "in order to help maintain the federal funds rate within the target range of 2 to 2-1/4 percent."
Last time FED stepped in (with money) was more than ten years ago. Qualifies as out of the ordinary.
Banks determine their own rate for overnight lending to other banks that need the money to maintain required cash reserves. That's what created the need for the recent repo "bailout." Cash reserves are protection required by the FED to backstop a failing bank, so the FED can't really eliminate or reduce them.
FED should let the market set high rates as was happening, without interfering. If banks have to pay a high rate to borrow very short term funds to satisfy reserve requirements just maybe they will position themselves to not need to borrow. This is simple "Debt 101" for your basic consumer.
As I said earlier high repo rates from lending banks is a sure sign that they they see increased risk with the loan to another bank. What does that tell you? Tells me the same thing it told me in 2008: buy more gold.
Keep an open mind, or get financially repressed -Zoltan Pozsar
@derryb said:
Banks determine their own rate for overnight lending to other banks that need the money to maintain required cash reserves. That's what created the need for the recent repo "bailout." Cash reserves are protection required by the FED to backstop a failing bank, so the FED can't really eliminate or reduce them.
I wasn't talking eliminate reserve, but eliminating paying interest on reserves.
FED should let the market set high rates as was happening, without interfering. If banks have to pay a high rate to borrow very short term funds to satisfy reserve requirements just maybe they will position themselves to not need to borrow. This is simple "Debt 101" for your basic consumer.
yeah. they did create their own problem, imo.
As I said earlier high repo rates from lending banks is a sure sign that they they see increased risk with the loan to another bank. What does that tell you? Tells me the same thing it told me in 2008: buy more gold.
although the fed says they don't have a rule over the external markets, the external markets do affect the fed funds rate.
when that outside repo market went to 9-10%, if pulled the effective fed funds rate outside of the range to 2.30% when the top of the range was 2.2% Thus they cared to intervene.
when that outside repo market went to 9-10%, if pulled the effective fed funds rate outside of the range to 2.30% when the top of the range was 2.2% Thus they cared to intervene.
The federal funds rate is the interest rate at which depository institutions lend reserve balances to other depository institutions overnight on an uncollateralized basis.
The effective Federal Funds Rate is the rate set by the FOMC (Federal Open Market Committee) for banks to borrow funds from each other.
There is no reason for the FED to set a rate that banks charge each other in the repo market when the banks can clearly ignore it. In setting a desired rate they only give these banks the opportunity to charge more which results in the FED having to put up money to bring the rate back into the FEDs desired range. Maybe the whole thing is nothing more than the banks' way of getting the FED to put up the money.
Keep an open mind, or get financially repressed -Zoltan Pozsar
New fear among the banks? The next crisis has started.
Oh wow this is awesome, I’m so excited, by the way how long will this crisis actually last since it has already started?
For those paying attention it is a continuation of the last crisis and has been going on for over a decade. Since we follow most of the advice we gave Japan, it will probably last a couple of decades as has their economic woes. An end to it will likely be worse news. Probably a good thing the FED keeps playing the music, the chairs are becoming scarce.
Keep an open mind, or get financially repressed -Zoltan Pozsar
@derryb said:
Banks determine their own rate for overnight lending to other banks that need the money to maintain required cash reserves. That's what created the need for the recent repo "bailout." Cash reserves are protection required by the FED to backstop a failing bank, so the FED can't really eliminate or reduce them.
I wasn't talking eliminate reserve, but eliminating paying interest on reserves.
FED should let the market set high rates as was happening, without interfering. If banks have to pay a high rate to borrow very short term funds to satisfy reserve requirements just maybe they will position themselves to not need to borrow. This is simple "Debt 101" for your basic consumer.
yeah. they did create their own problem, imo.
As I said earlier high repo rates from lending banks is a sure sign that they they see increased risk with the loan to another bank. What does that tell you? Tells me the same thing it told me in 2008: buy more gold.
But when it does, packs of cigarettes and airplane bottles of booze are better than five and ten dollar bills.. and sometimes, better than silver dollars
😉
When cash is king it is for a reason and that reason usually involves lack of faith in other alternatives. Lack of faith in markets always leads to gold's door.
Keep an open mind, or get financially repressed -Zoltan Pozsar
@derryb said:
Why am I not surprised. With you, It's always about the messenger. LOL
I made no reference to any messenger. Don't be paranoid.
Im merely commenting on the speculative nature of the discussion in which there a search for a four letter F-word; fact or fear. It's quite fascinating.
Incorporate negative rates into your discussion. What is the message and what does the messenger have to say about it?
How so? I'm asking you do interject the effect of negative rates into your discussion which you haven't yet. Do you not feel talking about negative rates would add to this topic?
"Because the New York Fed is not announcing which banks are drawing down the bulk of its loans, neither Congress nor the American people know if the money is flowing to U.S. banks or foreign bank subsidiaries in the U.S. Propping up troubled foreign banks is not what most Americans want their central bank to be doing. If the New York Fed is secretly funneling money to a unit of Deutsche Bank to prop it up, the American people need to know about it and Congress needs to be asking questions."
"The implication, to money market people, is there are big unknown counterparty risks out there and nobody wants to get caught in another ‘Lehman’ workout."
Keep an open mind, or get financially repressed -Zoltan Pozsar
Probably because it remains focused on the message and not the messenger.
Haha. You couldnt see facetiousness if it hit you in face. 😉
Speculation can be such a spectacle.
Continue.
you could add more to the discussion, but don't. "good debate" isn't a good debate.
I did enjoy your bantering back and fro, and believe you were at the cusp of discovering the root cause of this problem. I did provide a hint at why this was happening.
Where does the demand for negative rates originate? How does that play into the currency market? Is there a role of multi-national companies in the repo market? What role does the spread between US and European rates and Japanese rates have on the repo market? How are these markets settled?
If i kill threads because i put to rest nefarious conspiracy theory and ignorant suppostion and encourage original thought, then great, we are all better off. If you wish to be a manipulated pawn of doom, then continue arguing with yourself.
Primary dealers are expected to participate in open market operations consistently and competitively, in a variety of market environments, to support the implementation of monetary policy. In particular, a primary dealer is expected to participate consistently in any Treasury outright and repo operations that are conducted by the New York Fed’s Trading Desk (Desk).
Amherst Pierpont Securities LLC
Bank of Nova Scotia, New York Agency
BMO Capital Markets Corp.
BNP Paribas Securities Corp.
Barclays Capital Inc.
BofA Securities, Inc.
Cantor Fitzgerald & Co.
Citigroup Global Markets Inc.
Credit Suisse AG, New York Branch
Daiwa Capital Markets America Inc.
Deutsche Bank Securities Inc.
Goldman Sachs & Co. LLC
HSBC Securities (USA) Inc
Jefferies LLC
J.P. Morgan Securities LLC
Mizuho Securities USA LLC
Morgan Stanley & Co. LLC
NatWest Markets Securities Inc.
Nomura Securities International, Inc.
RBC Capital Markets, LLC
Societe Generale, New York Branch
TD Securities (USA) LLC
UBS Securities LLC.
Wells Fargo Securities, LLC
@MsMorrisine said:
as stated earlier, counterparty risk is not it.
we would hear about counterparty risk in other markets, too. i.e. derivatives market and with CDS.
this is a lack of cash crisis and for those under the federal reserve umbrella a required reserve deficiency for those that had such.
funny how there's a lack of cash issue until one bank is willing to pay another bank 10% overnight interest for some of the cash.
Tells me some banks are much better positioned in cash than others. The ones with a shortage would certainly be viewed as a risk by those with the cash.
And speaking of counter party risk in the derivatives markets, a failing Deutsche Bank holds a $43T derivatives book that puts many major US financial institutions at great risk. I'm sure that is on the mind of those institutions when asked by DB for an overnight loan. LOL
Would be interesting to know how much of this recent FED repo money is designed to keep DB afloat. We'll know soon enough. It's no secret that I have been forecasting DB's coming failure and the pending disaster it poses for all the US financial institutions caught up in it's massive derivative book. I'm now on the record that this whole FED repo fiasco is completely about prevent DB from taking the system down. Just how long it can be kept a secret remains to be seen.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Agree derryb, you've been on record indicating the imminent DB failure for the last 4 years. DB will not be allowed to fail. For some reason, you are unwilling to accept that scenario.
"Bongo drive 1984 Lincoln that looks like old coin dug from ground."
@OPA said:
Agree derryb, you've been on record indicating the imminent DB failure for the last 4 years. DB will not be allowed to fail. For some reason, you are unwilling to accept that scenario.
And their share price has fallen from $40 to $7.50. Yes, I am unwilling to accept that scenario.
Them "not being allowed" to fail has implications almost as serious as them being allowed to fail.
"Lehman will not be allowed to fail." lol
Keep an open mind, or get financially repressed -Zoltan Pozsar
Comments
a great read
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=18&cad=rja&uact=8&ved=2ahUKEwjdtsTy5-LkAhXSTN8KHWEYD_cQFjARegQIAxAB&url=https://www.wsj.com/articles/fed-will-weigh-resuming-balance-sheet-growth-at-october-meeting-11568916223&usg=AOvVaw0pMLZy4T1pfwb3as_Ub6-R
At the current price? No.
I was waiting for fiat and the world as we know it to collapse first. Maybe then I could trade a gold eagle for a 6 pack of beans. lol
The whole worlds off its rocker, buy Gold™.
Oh wow this is awesome, I’m so excited, by the way how long will this crisis actually last since it has already started? Days, months, years, decades?, or the proverbial “you’ll “know” when it ends”? Or is this a lifetime crisis? Possibly?...
Someone please let us know when this crisis has passed us, so at least maybe we can get something to eat or somethin...
the Fed liabilities are only as good as something written on a piece of paper. In a nutshell, paper promises beget only other kinds of paper promises.
yep.
organic balance sheet growth is the growth that occured before QE and the financial crisis.
it is not QE
Technically, it may not be QE but it doesn't really matter what it's called when it adds to the exponential increase in the debt load, which it does.
I knew it would happen.
more repos coming at the end of the quarter.
I change my mind.
they should not have loaded their balance sheets to the point of needing a fed intervention.
from ZH:
watch the video too
https://www.cnbc.com/2019/09/23/fed-repo-williams-says-we-were-prepared-for-the-funding-jolt.html
In a speech Monday morning in New York, Williams, who oversees the district’s pivotal trading desk, said issues has been expected in the repo market due to a confluence of factors that would sap liquidity, including corporate tax payments and settlement of Treasury auctions.
Fed officials responded with a series of operations that injected funds into capital markets, and on Friday announced that the program would continue through Oct. 10. The Fed also announced a 25 basis point cut in the funds rate Wednesday along with a 30 basis point reduction in the interest on excess bank reserves.
Where'd the Fed get all that money? Easy peasy - tap, tap, tap - poof! There ya go - no problemo!
In 2018, the New York Fed introduced a replacement, called the Secured Overnight Financing Rate, whose implementation is ongoing.
However, Williams said too many banks either are ignoring the transition or hoping LIBOR is extended. Williams said both approaches are dangerous.
“Implementation will be complex: financial contracts need to be scrutinized, operations need to be evaluated, and technology needs to be updated,” he said. “The work involves numerous jurisdictions and multiple asset classes, and will require changes from how business is conducted to how systems are built. These things take time, and time is running out.”
Banks should be working to discover where their LIBOR exposure lies and continuing to work towards the transition, Williams added, noting that contracts referencing U.S. dollar LIBOR transactions have a notional value of $200 trillion.
No manipulation there. Nothing to see. What could possibly go wrong? $200 trillion in contracts that all have to be re-done? Why is LIBOR on the way out? Who's going to be left holding the bag? Small local banks? Regional banks?
I knew it would happen.
Why is LIBOR on the way out?
google it
The FED prints money. Most of us believe what we read on paper.
tap tap tap yes and no
if they don't have it on account then they would, most of the repos are overnight. they potentially only need to tap tap tap once for them.
but this is not QE. the money comes back the next day plus a little interest, too.
Another day of intervention by the NY Fed:
https://www.marketwatch.com/story/new-york-fed-expands-size-of-thursday-planned-repos-2019-09-25
the "another day" is not news since they will continue repos into early October.
The news is that they are increasing the dollar amount of the repo operation today and that recent repos have been oversubscribed.
And the real news is the FED is having to take out of the ordinary steps to calm the markets and to keep the money flowing.
Keep an open mind, or get financially repressed -Zoltan Pozsar
repos are not out of the ordinary, but I agree that they do deal with out of the normal market conditions.
they just haven't needed them since the beginning of the QE days, which should be another indication that repos are not QE.
FED buys back control of rates: $75 billion in "re" purchases.
"The New York Federal Reserve Bank on Tuesday stepped into financial markets for the first time in more than a decade to keep interest rates in line with the Fed's target. The New York Fed said the $75 billion in repurchase agreements -- known as "repos" -- were made "in order to help maintain the federal funds rate within the target range of 2 to 2-1/4 percent."
Last time FED stepped in (with money) was more than ten years ago. Qualifies as out of the ordinary.
Keep an open mind, or get financially repressed -Zoltan Pozsar
What Has Frightened Wall Street Banks from Lending in the Repo Market?
Keep an open mind, or get financially repressed -Zoltan Pozsar
yes, I know it's been 10 years.
that's because QE made them unneeded.
https://fortune.com/2019/09/26/the-feds-repo-market-bailout-is-a-sign-of-deeper-problems-that-are-getting-worse-over-time/
The Fed’s Repo Market Bailout Is a Sign of Deeper Problems—That Are Getting Worse Over Time
I still say repos are not QE.
I do wonder if the Fed needs to remove interest on reserves and find some other prime method to control rates.
this "mandated on levels, " should read "on mandated levels, "
we will see how bad the issue is once the planned repos end. we will see if they taper them off or continue them.
Banks determine their own rate for overnight lending to other banks that need the money to maintain required cash reserves. That's what created the need for the recent repo "bailout." Cash reserves are protection required by the FED to backstop a failing bank, so the FED can't really eliminate or reduce them.
FED should let the market set high rates as was happening, without interfering. If banks have to pay a high rate to borrow very short term funds to satisfy reserve requirements just maybe they will position themselves to not need to borrow. This is simple "Debt 101" for your basic consumer.
As I said earlier high repo rates from lending banks is a sure sign that they they see increased risk with the loan to another bank. What does that tell you? Tells me the same thing it told me in 2008: buy more gold.
Keep an open mind, or get financially repressed -Zoltan Pozsar
I wasn't talking eliminate reserve, but eliminating paying interest on reserves.
yeah. they did create their own problem, imo.
or they are cash selfish.
although the fed says they don't have a rule over the external markets, the external markets do affect the fed funds rate.
when that outside repo market went to 9-10%, if pulled the effective fed funds rate outside of the range to 2.30% when the top of the range was 2.2% Thus they cared to intervene.
The federal funds rate is the interest rate at which depository institutions lend reserve balances to other depository institutions overnight on an uncollateralized basis.
The effective Federal Funds Rate is the rate set by the FOMC (Federal Open Market Committee) for banks to borrow funds from each other.
There is no reason for the FED to set a rate that banks charge each other in the repo market when the banks can clearly ignore it. In setting a desired rate they only give these banks the opportunity to charge more which results in the FED having to put up money to bring the rate back into the FEDs desired range. Maybe the whole thing is nothing more than the banks' way of getting the FED to put up the money.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Good debate.
Knowledge is the enemy of fear
Probably because it remains focused on the message and not the messenger.
Keep an open mind, or get financially repressed -Zoltan Pozsar
For those paying attention it is a continuation of the last crisis and has been going on for over a decade. Since we follow most of the advice we gave Japan, it will probably last a couple of decades as has their economic woes. An end to it will likely be worse news. Probably a good thing the FED keeps playing the music, the chairs are becoming scarce.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Haha. You couldnt see facetiousness if it hit you in face. 😉
Speculation can be such a spectacle.
Continue.
Knowledge is the enemy of fear
Discussion is all yours, have at it.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Or cash is king...
The world seldom ends.
But when it does, packs of cigarettes and airplane bottles of booze are better than five and ten dollar bills.. and sometimes, better than silver dollars
😉
Liberty: Parent of Science & Industry
When cash is king it is for a reason and that reason usually involves lack of faith in other alternatives. Lack of faith in markets always leads to gold's door.
Keep an open mind, or get financially repressed -Zoltan Pozsar
I made no reference to any messenger. Don't be paranoid.
Im merely commenting on the speculative nature of the discussion in which there a search for a four letter F-word; fact or fear. It's quite fascinating.
Incorporate negative rates into your discussion. What is the message and what does the messenger have to say about it?
Hint--watch out for flying frogs.
Knowledge is the enemy of fear
Well, there goes a good debate. LOL
Keep an open mind, or get financially repressed -Zoltan Pozsar
How so? I'm asking you do interject the effect of negative rates into your discussion which you haven't yet. Do you not feel talking about negative rates would add to this topic?
Knowledge is the enemy of fear
As always, talking with you is a thread killer. Discussion's all yours, have at it.
Keep an open mind, or get financially repressed -Zoltan Pozsar
you could add more to the discussion, but don't. "good debate" isn't a good debate.
MsM, he's all yours. Like talking to my kids.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Liberty: Parent of Science & Industry
The Fed Is Offering $100 Billion a Day in Emergency Loans to Unnamed Banks and Congress Is Not Curious Enough to Hold a Hearing
"Because the New York Fed is not announcing which banks are drawing down the bulk of its loans, neither Congress nor the American people know if the money is flowing to U.S. banks or foreign bank subsidiaries in the U.S. Propping up troubled foreign banks is not what most Americans want their central bank to be doing. If the New York Fed is secretly funneling money to a unit of Deutsche Bank to prop it up, the American people need to know about it and Congress needs to be asking questions."
"The implication, to money market people, is there are big unknown counterparty risks out there and nobody wants to get caught in another ‘Lehman’ workout."
Keep an open mind, or get financially repressed -Zoltan Pozsar
I did enjoy your bantering back and fro, and believe you were at the cusp of discovering the root cause of this problem. I did provide a hint at why this was happening.
Where does the demand for negative rates originate? How does that play into the currency market? Is there a role of multi-national companies in the repo market? What role does the spread between US and European rates and Japanese rates have on the repo market? How are these markets settled?
If i kill threads because i put to rest nefarious conspiracy theory and ignorant suppostion and encourage original thought, then great, we are all better off. If you wish to be a manipulated pawn of doom, then continue arguing with yourself.
Knowledge is the enemy of fear
It does not originate from market demand. It originates from central banks that demand an increase to inflation.
The US has rid itself of central banks in the past, just a matter of time before it happens again.
Keep an open mind, or get financially repressed -Zoltan Pozsar
cash is king...
Yeah, I'm somewhat hesitant to lighten up on cash for the time being.
However, Greg Hunter provides a good interview with Rob Kirby on USAWatchdog.com today. Interesting take on what's happening with the petrodollar.
I knew it would happen.
https://www.newyorkfed.org/markets/domestic-market-operations/monetary-policy-implementation/repo-reverse-repo-agreements
Repurchase agreements (also known as repos) are conducted only with primary dealers
Primary dealers are expected to participate in open market operations consistently and competitively, in a variety of market environments, to support the implementation of monetary policy. In particular, a primary dealer is expected to participate consistently in any Treasury outright and repo operations that are conducted by the New York Fed’s Trading Desk (Desk).
https://www.newyorkfed.org/markets/primarydealers
List of primary dealers
Current List, Additions, Removals & Name Changes
Primary Dealers
Amherst Pierpont Securities LLC
Bank of Nova Scotia, New York Agency
BMO Capital Markets Corp.
BNP Paribas Securities Corp.
Barclays Capital Inc.
BofA Securities, Inc.
Cantor Fitzgerald & Co.
Citigroup Global Markets Inc.
Credit Suisse AG, New York Branch
Daiwa Capital Markets America Inc.
Deutsche Bank Securities Inc.
Goldman Sachs & Co. LLC
HSBC Securities (USA) Inc
Jefferies LLC
J.P. Morgan Securities LLC
Mizuho Securities USA LLC
Morgan Stanley & Co. LLC
NatWest Markets Securities Inc.
Nomura Securities International, Inc.
RBC Capital Markets, LLC
Societe Generale, New York Branch
TD Securities (USA) LLC
UBS Securities LLC.
Wells Fargo Securities, LLC
they aren't going to give up the names of exactly who are using the repos without a fight.
as stated earlier, counterparty risk is not it.
we would hear about counterparty risk in other markets, too. i.e. derivatives market and with CDS.
this is a lack of cash crisis and for those under the federal reserve umbrella a required reserve deficiency for those that had such.
funny how there's a lack of cash issue until one bank is willing to pay another bank 10% overnight interest for some of the cash.
Tells me some banks are much better positioned in cash than others. The ones with a shortage would certainly be viewed as a risk by those with the cash.
And speaking of counter party risk in the derivatives markets, a failing Deutsche Bank holds a $43T derivatives book that puts many major US financial institutions at great risk. I'm sure that is on the mind of those institutions when asked by DB for an overnight loan. LOL
Would be interesting to know how much of this recent FED repo money is designed to keep DB afloat. We'll know soon enough. It's no secret that I have been forecasting DB's coming failure and the pending disaster it poses for all the US financial institutions caught up in it's massive derivative book. I'm now on the record that this whole FED repo fiasco is completely about prevent DB from taking the system down. Just how long it can be kept a secret remains to be seen.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Agree derryb, you've been on record indicating the imminent DB failure for the last 4 years. DB will not be allowed to fail. For some reason, you are unwilling to accept that scenario.
And their share price has fallen from $40 to $7.50. Yes, I am unwilling to accept that scenario.
Them "not being allowed" to fail has implications almost as serious as them being allowed to fail.
"Lehman will not be allowed to fail." lol
Keep an open mind, or get financially repressed -Zoltan Pozsar
AIG was not allowed to fail...& didn't
so you're predicting more QE as am I.
Keep an open mind, or get financially repressed -Zoltan Pozsar