Repo Rates Soared—Here's Why It Matters
Money For the Rest of Us25 Syys 2019

Repo Rates Soared—Here's Why It Matters

How a liquidity crunch in the short-term lending markets sent interest rates soaring. Why this is a huge blunder on the part of the Federal Reserve, and what it means for us as individual investors.

Topics covered in this episode include:

  • What are repurchase agreements and how are they used to finance U.S Treasuries.
  • How outflows from money market funds and hoarding by banks led to a liquidity crunch that caused repo rates to spike to 10%.
  • Why banks are hoarding reserves held at the central bank even though there are over $1.4 trillion of them, up from $20 billion in 2007.
  • How quantitive easing increases reserves and quantitative tightening reduces reserves.
  • How the Federal Reserve was able to stop the disruption in the repo market, even though the central bank was caught off guard and could have prevented it.
  • How individual investors can protect themselves from unintended consequences arising from the unconventional policies and experiments being conducted by the Federal Reserve and other central banks.


Thanks to The Great Courses Plus and LinkedIn for sponsoring the episode.

For show notes and more information on this episode click here.

  • [0:20] The Fed loses control over policy rates, and repo interest rates soar.
  • [2:19] What is a repurchase agreement (repo)?
  • [5:02] Why the big players in repos pulled back on Sept. 16th.
  • [8:38] Banks need more liquidity because of regulations.
  • [12:53] Why reserves have fallen so low.
  • [17:43] How does the reserve balance get reduced?
  • [19:23] The Fed may have shrunk it’s balance too far.
  • [21:36] What can be done about the reserve shortage?
  • [24:17] What can we learn from the repo rate raise?

See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Jaksot(572)

What Trump Wants Part 2 - How Trade Deficits and Capital Flows Can Harm or Help Countries

What Trump Wants Part 2 - How Trade Deficits and Capital Flows Can Harm or Help Countries

How trade deficits are making the U.S. poorer, while in the past they have made the U.S. wealthier.Topics covered include:Two ways countries can increase their competitivenessHow savings always equals...

19 Maalis 202522min

Tariffs and the Mar-a-Lago Accord: What Trump Really Wants

Tariffs and the Mar-a-Lago Accord: What Trump Really Wants

How the Trump administration is using tariffs as a negotiating tool to weaken the U.S. dollar and increase the global competitiveness of U.S. manufacturers.Topics covered include:Why U.S. stocks are f...

12 Maalis 202528min

Why Japanese Stocks Could Outperform with Howard Smith - FEG Insight Bridge

Why Japanese Stocks Could Outperform with Howard Smith - FEG Insight Bridge

This week on episode 514, we share a conversation between Howard Smith of Indus Capital and Greg Dowling of FEG Investment Advisors on why Japan could surprise investors over the next decade with stro...

5 Maalis 202548min

Crypto: Innovation or Insanity? Meme Coins, Hacks, and Strategic Bitcoin Reserves

Crypto: Innovation or Insanity? Meme Coins, Hacks, and Strategic Bitcoin Reserves

We consider the incongruency of a U.S. Strategic Bitcoin Reserve, the latest crypto exchange hack, and how most participants lost money on the Trump meme coin. Given all that, we review some areas whe...

26 Helmi 202523min

Unlocking Hidden Returns: How Mortality Credits Boost Retirement Income

Unlocking Hidden Returns: How Mortality Credits Boost Retirement Income

How using a deferred income annuity can increase retirement income compared to an immediate annuity or a bond ladder.Topics covered include:How immediate annuities and deferred income annuities workWh...

19 Helmi 202525min

What Are Sovereign Wealth Funds and Does the U.S. Need One?

What Are Sovereign Wealth Funds and Does the U.S. Need One?

The U.S. and the UK each announced they were establishing sovereign wealth funds. We explore the purposes and types of sovereign wealth funds, how they invest, and some concerns with the U.S. establis...

12 Helmi 202519min

Contrarian Investing with GMO's Ben Inker - FEG Insight Bridge

Contrarian Investing with GMO's Ben Inker - FEG Insight Bridge

This week on episode 510, we share a conversation between Ben Inker of GMO and Greg Dowling of FEG Investment Advisors on contrarian investing, deep value stocks, and the rise of passive investing. Da...

5 Helmi 202550min

How to Invest in Private Credit / Direct Lending

How to Invest in Private Credit / Direct Lending

We explore what private credit, or direct lending, is and how to invest in it. We also show how it is similar and different from investing in leverage loans and CLOs.Topics covered include:Why more co...

29 Tammi 202526min

Suosittua kategoriassa Liike-elämä ja talous

sijotuskasti
mimmit-sijoittaa
rss-rahapodi
psykopodiaa-podcast
hyva-paha-johtaminen
ostan-asuntoja-podcast
rss-rahamania
rss-sami-miettinen-neuvottelija
rss-lahtijat
rss-rentotapaus
kultaiset-hoitajat
rss-startup-ministerio
rss-seuraava-potilas
herrasmieshakkerit
rss-strategian-seurassa
asuntoasiaa-paivakirjat
rss-h-asselmoilanen
rss-tyoelamasta-podcast
rss-vaikuttavan-opettajan-vierella
rss-set-for-life-sijoita-ja-vaurastu