Eurodollar University

The Fed faces a year-end surge in repo borrowing, raising eyebrows about collateral flow issues. Repo fails are spiking, signaling tightness rather than a full-blown crisis. Meanwhile, Treasury bill yields are tumbling, hinting at collateral scarcity. Jeff also explores how the Fed's not-QE practices could worsen this situation. Discussions on FOMC minutes reveal a tilt toward rate cuts, while a stabilizing yield curve suggests underlying consumer vulnerabilities heading into 2026.

Massive protests in Iran highlight a global wave of unrest fueled by economic collapse. Younger generations are at the forefront, angered by their bleak financial futures. Economic hardship is overshadowing cultural issues, leading to political upheaval. Historical examples reveal that weak recoveries often result in voter backlash. As Gen Z protests rise worldwide, the discussion pivots to whether these youth movements will foster reform or push extreme ideologies. The podcast warns that political instability poses the greatest systemic risk.

Repo fails have surged to a staggering $573 billion, highlighting severe cash and collateral issues. This spike, occurring in mid-December, indicates rising anxiety in credit markets. The unraveling of Tricolor shows systemic failures in underwriting, unveiled by a keen junior analyst. Additionally, dealers are hoarding coupons to mitigate borrowing costs amid tightening collateral. The discussion questions media narratives blaming the Fed, emphasizing the complexity of credit systems and frauds that further complicate market dynamics.

Steve Van Metre, a financial commentator specializing in consumer spending, joins the discussion to analyze CarMax's dramatic sales collapse and its implications for the entire consumer economy. They delve into how CarMax's failed pricing strategies and mounting inventory issues have exposed vulnerabilities in retail. With rising loan delinquencies and extended financing terms, the duo highlights the precarious state of consumer finances. They also explore the cascading effects on manufacturers, further emphasizing the urgency of understanding this economic landscape.

The puzzling weakness of the Japanese yen takes center stage as policy rates rise. Despite government interventions, the yen continues to decline, highlighting the limitations of such strategies. Jeff Snider analyzes India and China as contrasting case studies, revealing deeper issues behind currency movements. He argues that global dollar-credit conditions, rather than mere interest rates or trade balances, play a crucial role. The discussion wraps up with insights into how recent banking shocks have heightened the eurodollar premium, influencing global FX dynamics.

Repo fails have skyrocketed to over $300 billion, signaling significant issues in the financial system. As collateral becomes increasingly scarce, the podcast reveals how this situation affects everything from Treasury inventories to private credit. The discussion also highlights the growing stress in private credit markets and the implications of withholding collateral, potentially leading to cascading delivery failures. With market skepticism rising, it’s clear that liquidity concerns are mounting and investors are on high alert.

In an eye-opening analysis, the GDP surge raises eyebrows as strong numbers clash with falling consumer confidence. Skepticism mounts as safe-haven assets like gold see a spike, signaling distrust in the economic data. Jeff Snider delves into the disconnect between GDP growth and bleak labor market indicators, exposing flaws in the political narratives surrounding economic success. With muted bond market reactions and a deeper look into unsustainable GDP components, the conversation highlights a troubling trend of stagnation beneath the surface.

Foreigners dumped a staggering $61.2 billion in U.S. Treasury assets in October, raising eyebrows about America's economic stability. This isn't just a reaction to politics or inflation; it reveals deeper eurodollar mechanics. The surge in repo rates and the Fed's facility usage highlights deflationary pressures and credit issues. Jeff connects private-credit failures to increased dealer risk aversion. He explores historical eurodollar crises, hinting that more monetary turbulence could be on the horizon. Buckle up for the implications!

Steve Van Metre, a financial markets commentator and credit-market analyst, shares his insights on the intersection of AI hype and credit cycles. He discusses Blue Owl's surprising decision to bail on a partnership with Oracle, highlighting shifting funding dynamics. Van Metre emphasizes lenders' growing concerns over Oracle's cash flow and the broader implications for AI investments. The conversation takes a deep dive into the ramifications of tightening credit and how Wall Street's bearish outlook on AI affects firms, ultimately linking these trends to Bitcoin's struggles.

Miami tops the nation in home de-listings, as sellers pull properties off the market amid worsening conditions. This surge highlights significant issues in the housing market, particularly in Florida. Despite falling interest rates, buyers remain hesitant, leading to a decline in transactions. The podcast explores how high ownership costs and weak incomes challenge affordability. Additionally, it argues that lower mortgage rates indicate economic weakness, contradicting the narrative that they stimulate recovery.