View: 2019-11-14 (2).jpg (796×506)

2019-11-14 (2).jpg (796×506)

Comments

maxwellllllmaxwellllll
Tim, I feel like a big dummy, but--as I am completely self-taught in the world of finance--I can't wrap my head around the repo market, no matter how many articles I read about it. I understand that it has something to do with liquidity (with lenders being able to remain solvent?), and I can see from everything that's come out about repo over the last 30ish days that there is a whole lot more Fed goosing than is typical, but I still don't understand what it all means. Can you point me to anything that you might be aware of to help me better comprehend what all the fuss is about? (please and thank you) 11/14/19
crashingbullcrashingbull
Saw a good video from Hedgeye on the subject. What I took away from it was there is not enough liquidity in the overnight markets from some banks and dealers due to fear around collateral quality. Some of the collateral posted is highly suspect evidently and its the fear of something blowing up in the debt market that is drying up liquidity. These Fed operations are merely a band-aid on some bigger structural problem. 11/14/19
maxwellllllmaxwellllll
Thanks, bull. I'll have to hunt for that video later on. I was able to find a couple of Bloomberg pieces that helped clarify better than others I'd found before. https://www.bloomberg.com/news/articles/2019-09-19/the-repo-market-s-a- mess-what-s-the-repo-market-quicktake and https://www.bloomberg.com/quicktake/the-repo-market 
My understanding now is that it's a market for entities that have piles of cash to make a quick buck off places that have piles of illiquid assets and need temporary liquidity (cash). But there was a sudden hiccup two months ago, where the folks with the piles of cash weren't as interested in the other guys' assets, which drove the repo rate through the roof. So the Fed has stepped in with its own piles of cash, *and* they're extending the terms far beyond the "temporary" (overnight) into weeks and months (which, if I'm reading correctly, hasn't really ever happened before??) So my new question is this: is the repo market utterly opaque? Can we not see who these entities are who need billions in liquidity and whom the existing cash market isn't terribly interested in supplying? 11/14/19
motterpaulmotterpaul
Another insane WSB trade: $100k in Amazon puts with breakeven $58 below close today, expiring TOMORROW. 
https://preview.redd.it/cu2dwu87hpy31. jpg?width=1080&format=pjpg&auto=webp&s=f74a9ab1c5bd15797ac4bd164fcccd4ae14 1fc8f 
11/14/19
motterpaulmotterpaul
Sorry about the link: on reddit try this thread: https://www.reddit.com/r/wallstreetbets/comments/dweqe5/100k_on_amzn_puts/ 11/14/19
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