The Repo Market is in crisis
The primary dealers (crony fed banks that buy and sell treasuries) usually provide tremendous liquidity to the repo market. But now, all of a sudden they've stopped. Why? They're giving up a guaranteed profit, so it really makes no sense? There are only a few explanations of why this bailout of the repo market was required. And I discuss them all in this short, info-packed vid on the Fed QE4 bailout of the repo market.
In the video we discuss the following:
1. How primary dealers operate with the Fed
2. How primary dealers operate in the repo market 3. Why what the media is telling us doesn't add up
4. My best assumptions why the repo market needs a bailout
5. What is the repo market telling us about one or more systemically important banks
NOTE: A lot of info for this video came from the MacroVoices podcasts about the repo market with Jeff Snider. The MacroVoices podcast is by far the best podcast available on these topics, please check them out on iTunes. Here's a link to the specific podcast with Jeff Snider on the repo market. It's a must-listen. The MacroVoices guys are real pros! 😉