Reverse REPO

General Discussion
#1

Hello All,

Could someone help me understand the implications of the RREPO amount increasing? Does it mean there is a liquidity problem? How would that affect a Hedge funds margin requirement, or does it?

Thanks in advance.

#2

It does signal that banks are holding lots of cash with nowhere to profitably lend it.

#3

Good write-up here Bloomberg - Are you a robot?

^lol at the link description

#4

On a positive note, guess where all the money to cover the MOASS is going to come from…

#5

Hah - as long as they pay up, I’m good.

What’s interesting to me is that there’s so much money lying around but they are still stifling certain highly-profitable consumer loans like equity loans, credit lines, and other retail products. This originally started during COVID but never really went away. Makes me wonder if this is more writing on the wall that we’re in for a bumpy ride.

1 Like
#6

Yep, I think it will be worse than anyone realises. Essentially, the Fed printed trillions but didn’t have a plan for how to distribute it in a beneficial way. None of it went in to infrastructure, none of it went in to pulling manufacturing back inside the US, none of it went in to shaping America moving forward. Instead it all just ended up in the Finance sector where it was leveraged to the hilt. Those birds are now coming home to roost. They are large birds too, and there are lots of them.

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