5 Systemic Alarm Bells You Need To Know As Credit Suisse Fails
Credit Suisse has failed and been rescued. This may have prevented an immediate crisis, but danger remains.
Here are five alarm bells that are ringing loudly.
Silicon Valley Bank: The Big Problem That You Need To Know
The recent failure of SVB has driven markets into a frenzy, but the narratives are missing a broader point – bank runs are symptoms of a much bigger problem.
A Simple 0.05% Increase Caused A $235 Billion Tsunami. Why?
The Fed hiked the rate it pays on reverse repo from 0 to 0.05% last week. While this sounds tiny, it has already pulled in $235bn. What are the implications?
Why Is Reverse Repo Use So High? Focus On Collateral! 2
Low Yields in 5 year Note auctions are lower by about 60 basis points since March. This indicates that the UST shortage is spreading to the rest of the curve!
Why Is Reverse Repo Use So High? Focus On Collateral! 1
Skyrocketing use of reverse repo with the Fed is a matter of collateral scarcity. Is this corroborated by investor demand at US Treasury auctions?
QE vs Repo 2: Why Negative Rates Are Dangerously Important
If you were offered an investment that returns -0.70% after two years, would you take it? No! Yet that’s what German 2 year bonds are trading for. Why?
What You Need To Know About The Fed’s Reverse Repo 2
With markets & leverage at extraordinary levels, sky high reverse repo takeup is another sign that the financial system is vulnerable to shock. Caveat emptor!
What You Need To Know About The Fed’s Reverse Repo 1
Takeup of the Fed’s Overnight Reverse Repo facility has surpassed its Covid high, reaching ~$300 bn in the last 3 weeks. Why the sudden & dramatic increase?
When Will You Pay To Lend Money For US Treasuries?
Are recent acute liquidity problems in the Treasury market due to recent narratives focused on inflation? Or is there something more going on, like in repo?
What You Need To Know About The Repo Market 4
Liquidity is what truly matters in the Repo market, and when it dries up, all other financial markets fall into chaos, as ‘08 and ‘20 both demonstrated.
