Confirmation Bias or Not? Lets see if the trend prevails out of the current "BondFearShakeout"....Who will win the Game of Chicken?
Just remember Market Transactions = Sellers & Buyers...daily/weekly/monthly, the "Winners" change out! Adapt or Die!
Short Term: FearShakeout & UP
Med Term: MAR OPEX...we will see what the VolatilityBro's leave us?
Cheers...see you at HH!
Just remember Market Transactions = Sellers & Buyers...daily/weekly/monthly, the "Winners" change out! Adapt or Die!
Short Term: FearShakeout & UP
Med Term: MAR OPEX...we will see what the VolatilityBro's leave us?
Cheers...see you at HH!
@AndreasSteno
Thread on why this Repo squeeze story is mostly BS
- The Fed backstops the market at -2% daily (no drama) but an afternoon squeeze can of course happen
- SLR doesn't need to be prolonged tonight by Powell. The Fed can just step up the SOMA Securities Lending Program.
2/n. The practical reasoning behind a prolongation of the SLR-relief would be to dis-incentivize the current short-positioning in e.g. 10yr Treasuries, but it would likely fundamentally worsen the shortage of 10yr bonds.
3/n Second, the calls for a Twist operation as a result of a repo squeeze makes no sense as it would lead to an even bigger shortage of 10yr bonds, if the Fed started buying more of them. Twist would WORSEN this situation, not improve it.
4/n. The consensus is probably that the SLR-relief will be prolonged since we otherwise risk a bonanza in bond markets due to the influx of USD reserves.
That we agree upon!