Rebel Capitalist News Holy Sh*t There's A Problem In The REPO MARKET...Again
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Oct 22, 2025 Unusual stress in the repo market signals deeper issues. Recent spikes in the SOFR-Fed Funds spread highlight puzzling market dynamics. A shift from liquidity concerns to rising counterparty risks is unfolding. Weak oil prices and falling yields indicate weakening demand. Alarming reports on bad loans at regional banks raise red flags. Collateral misrepresentation heightens fraud risks as borrowers juggle commitments. The rise of shadow banking complicates regulations and moral hazards. George calls for strategic wealth protection amid financial bubbles.
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Repo Spikes Reflect Counterparty Risk
- Repo rate spikes signal rising counterparty risk, not just a liquidity shortage.
- Banks charge more in secured lending when they fear collateral or borrower problems.
Oil Drop Signals Demand Weakness
- Falling oil prices point to weakening demand and softer economic expectations.
- Energy contraction supports the view that nominal GDP expectations are declining.
Yield Curve Shows Lower GDP Expectations
- Bond yields falling across the curve reflect lower expectations for future nominal GDP.
- The curve inversion and low 10-year yield are economic signals, not proof of monetary debasement.