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Those T-bill purchases drew enormous demand, banks requesting nearly four times as much cash from the Fed with .
These aggressive steps from the Fed, along with the strong demand from banks, shows that the overnight lending market is not back to normal. Banks are still clamoring for cash -- and the Fed is rushing to fill the vacuum.
The NY Fed eased the stress by injecting tons of cash, marking its first rescue in the overnight lending market since 2008.
"It is worrisome that these numbers continue to rise, and we don't yet have a very clear explanation," said Colas.
The only possible explanation, is someone really needed to lock in cash for month end (the maturity of the op is on Nov 7) which is when a "No Deal" Brexit may go live, and as a result one or more banks are bracing for the worst. The question, as before, remains why: just what is the source of this unprecedented spike in liquidity needs in a system which already has $1.5 trillion in excess reserves? And while we await the answer, expect stocks to close pleasantly in the green as dealers transform their newly granted liquidity into bets on risk assets.
originally posted by: scraedtosleep
a reply to: toysforadults
Could this be related?
Lot of ceo's resigning.
During the first three quarters of 2019, 1,160 CEOs left their positions, according to the staffing firm Challenger, Gray, & Christmas.
This figure exceeds the number of CEOs who departed during the same nine-month span at the height of the 2008 recession (which saw 1,132 CEO departures).
The tech sector has seen the second-highest number of CEO departures, with 154 executives in that industry leaving their positions.
Repo 105 was a type of loophole in accounting for repurchase (repo) transactions that the now-extinguished Lehman Brothers exploited in an attempt to hide true amounts of leverage during its times of trouble in 2007-2008. In this repurchase agreement, since updated to close the loophole, a company could classify a short-term loan as a sale and subsequently use the cash proceeds from the "sale" to reduce its liabilities.
Per the source, the first loan worth $340 million, backing the leveraged buyout of Smart & Final grocery chain by Apollo Global Management, was priced at a discount of 90 cents on the dollar by a group of banks led by Deutsche Bank, on the one hand. Moreover, such deal eroded the fees to be earned by the bank on the transaction. Though the amount of loss was not known, it was incurred as investors refrained from buying the debt under the prior terms offered.
Germany's economy may have already slumped into recession, its central bank says