Eurodollar University Its Starting: The Repo Market Is Failing?!
Jan 9, 2024
The podcast explores the recent surge in repo fails and the impact on swap spreads. It discusses the Treasury Department's cutback on collateral supply and its correlation with interest rates. Negative swap spreads signify deteriorating monetary conditions and increased demand for safety. The narrative of too many treasuries is debunked as the rising demand continues. The repo market failure is not just a bank arbitrage, but a broader issue affecting the monetary system.
Chapters
Transcript
Episode notes
1 2 3 4 5
Introduction
00:00 • 2min
The Impact of Treasury Department's Cutback on Collateral Supply and Correlation with Interest Rates
02:19 • 2min
Significance of Negative Swap Spreads
04:39 • 7min
The Narrative of Too Many Treasuries and the Collateral Shortage
12:00 • 3min
Repo Market Failure and Banks' Hesitance to Engage in Higher Return Activities
14:32 • 5min