Cracks emerging in money markets?
Moderator: Global Moderator
Re: Cracks emerging in money markets?
The Fed said they will inject liquidity until October 10-ish. So what happens after then???
- Attachments
-
- Liz Ann Sonders
- Screenshot 2019-09-24 at 9.01.14 PM.png (148.74 KiB) Viewed 20371 times
-
- woman screaming at cat meme
- Screenshot 2019-09-24 at 8.58.18 PM.png (734.96 KiB) Viewed 20372 times
Re: Cracks emerging in money markets?
Fuhget about it, it don’t mean nuthin.
- dualstow
- Executive Member
- Posts: 14304
- Joined: Wed Oct 27, 2010 10:18 am
- Location: synagogue of Satan
- Contact:
Re: Cracks emerging in money markets?
I hope Pug won’t mind if I add a WSJ link. Actually, the link in the OP is from the WSJ.
Fed Adds $63.5 Billion to Financial System in Repo Transaction
https://www.wsj.com/articles/fed-adds-6 ... 1569846438
Fed Adds $63.5 Billion to Financial System in Repo Transaction
https://www.wsj.com/articles/fed-adds-6 ... 1569846438
- dualstow
- Executive Member
- Posts: 14304
- Joined: Wed Oct 27, 2010 10:18 am
- Location: synagogue of Satan
- Contact:
Re: Cracks emerging in money markets?
I thought you always asked for a non-paywalled alternative. I’m probably thinking of someone else, then.MangoMan wrote: ↑Mon Sep 30, 2019 8:31 pmWhy would I mind?dualstow wrote: ↑Mon Sep 30, 2019 10:33 am I hope Pug won’t mind if I add a WSJ link. Actually, the link in the OP is from the WSJ.
Fed Adds $63.5 Billion to Financial System in Repo Transaction
https://www.wsj.com/articles/fed-adds-6 ... 1569846438
Re: Cracks emerging in money markets?
¯\_(ツ)_/¯
Re: Cracks emerging in money markets?
Through Q2 2020. I wonder if they can really stop at that point.shekels wrote: ↑Tue Oct 15, 2019 10:59 am When is QE not QE?
The new-new-new plan.
https://wolfstreet.com/2019/10/11/10-ye ... ury-bills/
Re: Cracks emerging in money markets?
Sounds like a de facto standing repo facility, which the Fed proposed earlier this year.
If so, maybe at some point they'll just "make it official" and replace their current ad hoc repo market interventions with a standing repo facility.
If so, maybe at some point they'll just "make it official" and replace their current ad hoc repo market interventions with a standing repo facility.
Re: Cracks emerging in money markets?
Oh of course. That would be because I just bought long bonds!
-
- Executive Member
- Posts: 5994
- Joined: Wed Dec 31, 1969 6:00 pm
Re: Cracks emerging in money markets?
Thanks for this info, everyone.sophie wrote: ↑Sun Sep 22, 2019 8:42 am 77% repos? That's gone up since I last checked (was about 60%). Crazy.
I only wish FDLXX could be used as a sweep account. It's not that hard to keep shifting cash into it though. With the smartphone app I can do it while walking to work, or while stuck in boring meetings. I also have 3 sets of T bills on autoroll, and it looks like you can add to those positions anytime with the "buy" button. Pugchief have you tried that?
Most of my Fidelity assets are in two sets of T-bills with autoroll.
I have just entered an order to move most of my "cash" (about 25% of my Fidelity account) from SPAXX to FDLXX, which should be executed on Monday.
- Kriegsspiel
- Executive Member
- Posts: 4052
- Joined: Sun Sep 16, 2012 5:28 pm
Re: Cracks emerging in money markets?
You there, Ephialtes. May you live forever.
Re: Cracks emerging in money markets?
Repo Market Simplified, or maybe not.
Printing is always an option until it is not.
Jeff Snider has his opinion explained.
https://www.youtube.com/watch?v=w5AR-KBVgJ0&t
Printing is always an option until it is not.
Jeff Snider has his opinion explained.
https://www.youtube.com/watch?v=w5AR-KBVgJ0&t
¯\_(ツ)_/¯
-
- Senior Member
- Posts: 107
- Joined: Sat Jul 20, 2019 12:53 pm
Re: Cracks emerging in money markets?
Im not sure there are cracks emerging in money markets. There are many theories on why this is happening. One is the concern about counterparty risk which really came to the forefront with the MBS crisis.
My theory is that is is more likely because the Fed started paying interest on reserves, both required and excess. The fed pays 1.6% right now on any reserves held with it. If a bank can just deposit with the fed and earn a guaranteed 1.6%, why bother with the repo market and take whatever limited repo risk?
They started paying interest on reserves to make it more palatable for banks to have higher reserves....making them stronger. However, this is a form of money tightening IMHO.
Therefore the Fed is stepping in.
Its definitely broken, but im not sure I would read in that there is a lot of risk in money markets now.
My theory is that is is more likely because the Fed started paying interest on reserves, both required and excess. The fed pays 1.6% right now on any reserves held with it. If a bank can just deposit with the fed and earn a guaranteed 1.6%, why bother with the repo market and take whatever limited repo risk?
They started paying interest on reserves to make it more palatable for banks to have higher reserves....making them stronger. However, this is a form of money tightening IMHO.
Therefore the Fed is stepping in.
Its definitely broken, but im not sure I would read in that there is a lot of risk in money markets now.
Re: Cracks emerging in money markets?
I keep reading this thread title as something like "emerging markets money market funds".
And i'm like... why the hell would anyone buy something like that???
And i'm like... why the hell would anyone buy something like that???
MB
Ruby on Rails rules all
www.allterraininvesting.com
Ruby on Rails rules all
www.allterraininvesting.com