Discover and read the best of Twitter Threads about #repo

Most recents (20)

1/ MORE ANALYSIS-Goldman's new head of #digitalassets is a #repo trader based in LONDON. This is significant bc UK law basically has no limits on #rehypothecation. To be clear I'm not worried abt #bitcoin--as a system it's immune to WallSt's leverage games
2/ That doesn't mean its price won't be impacted tho--bc #rehypothecation fulfills real demand w/ artificially created supply & thereby suppresses price, all else equal. Rehypothecation works as long as there's a lender of last resort. But #bitcoin has no lender of last resort!🚧
3/ So, how many times could a #bitcoin be rehypothecated? In UK there's basically no limit bc the broker/dealer takes outright title to the customer's asset. This is why Lehman transferred so many of its assets to its UK subsidiary from its US subsidiary. kramerlevin.com/en/perspective…
Read 6 tweets
YesBank's 15000Cr #FPO opens on 15thJuly,with 200Cr for employees

#SBI holds 48%+ stake &will invest 1760Cr in FPO

15000Cr will boost #CET-1 of Yes

Brilliant execution by @narendramodi govt--in just 5 months since it exploded, turnaround of #YesBank,tells you how it is done💪
Govt to invest Rs12450Cr in National,United&Oriental Insurance, with their merger being called off for now

23 #CPSEs of govt to invest Rs1.65 lakhCr in FY21

6195.08Cr given as #RevenueDeficit grant by Union,to States

@narendramodi govt working on multiple fronts,despite #Covid
This week #HdfcBank&Bank of Maharashtra cut #MCLR by 20bps, across tenors

SBI cut MCLR by 5-10bps for 3mth tenor,to 6.65%

#SBI's 1yr MCLR is also low@7%

#Repo cut of 135bps in 2019& 115bps in 2020,to 4%,has lowered lending rates& #EMIs,helping middle class&businesses

#Economy
Read 8 tweets
#RBI cut by 40bps each of these👇
#Repo rate to 4%
#ReverseRepo to 3.35%
#BankRate to 4.25%

Decision was reached after 5:1 vote,with #ChetanGhate,lone voice calling for 25 bps cut

#MPC meet was held ahead of schedule from 3rd-5th,June

#EMI #moratoroum extended by 3 more months
Moratorium extension till 31st August 2020,is both timely &reflective of @narendramodi govt's alacrity--Big relief to #MiddleClass

Measure to convert #moratorium interest payment into #TermLoan payable in FY21,is helpful

This will reduce #NPAs &stress on banks' balance sheets
#RBI's cut in #Repo will reduce cost of funds&extension of #moratorium will be supportive of financial stability;#Rates across #YieldCurve will move lower from current levels

Fall in #ReverseRepo rate will disincentivise banks from #hoarding #liquidity&coax them to lend

#Covid
Read 10 tweets
#AatmaNirbharBharatAbhiyan
Based on 👇

Land,Labour,Liquidity&Laws that are not isolationist but inclusive

Ease of Doing Business

DBT,JanDhan,Aadhar, Micro Insurance,Ujjwala Yojana, Ayushman Bharat, PM Awaas Yojana,PM FasalBima Yojana,Krishi Sinchai,Swachh Bharat--Key Landmarks
GST,IBC&PSU Bank Recapitalisation in last 6 yrs,have been big reforms

52606Cr given via #DBT to 41Cr #JanDhan holders

Free wheat&rice to 69Cr ration card holders

18000Cr tax refunds given

Free cylinders to 8Cr #Ujjwala holders

#20lakhcrores #COVIDー19
#atmanirbharbharat
Project DevelopmentCells,working for Promotion of Champion Sectors,in States

#MakeInIndia&Upgradation of Industrial Infra,a success&more will be done to #Decongest economy

3376 SEZs&IndustrialParks with 5 lakhhectares,to be ranked& mapped,in terms of readiness for competition
Read 20 tweets
RBI has announced Rs 50000 Cr #SpecialLiquidityFacility for #mutualfunds,to ease redemption pressures

#RBI will conduct #Repo operations of 90 days tenor at fixed repo rate

This Special Facility is on-tap,open-ended&will particularly help #DebtSchemes of MFs,witnessing outflows
#SpecialLiquidityFacility for #mutualfunds is available from today,April 27,2020 till May 11, 2020,or up to utilization of allocated amount of Rs 50000Cr whichever is earlier

@narendramodi govt's calibrated approach to calm down frayed nerves,is timely&noteworthy

#coronavirus
Funds availed under this facility shall be used by banks solely for meeting #liquidity requirements of #mutualfunds by 👇

Extending loans

Outright purchase of #Repos

Or against collateral of corporate bonds,commercial papers, debentures&certificate of deposits,held by #MFs👍
Read 6 tweets
Finally, after so much wait, @RBI Governer comes out to provide much needed relief to economy - key announcements thread:

#RBI #economy #rbigovernor
1. Yes, even after all the projections of economic growth slip, India might still stay at the top of global economic growth chart (As per IMF).

#IMF #GDP
2. NBFCs, this time RBI has looked out for you.

TLTRO 2.0 - targeted long term repo operations of INR 50k crore ease the liqudiity issues, specifically for NBFCs.

#NBFC
Read 9 tweets
"The Great Wall Street Housing Grab

Hundreds of thousands of single-family homes are now in the hands of giant companies — squeezing renters for revenue and putting the American dream even further out of reach."

#FedHistory #MissionAccomplished

archive.fo/wTRBR
Say hello to your new German landlord, America!
Or maybe you'd prefer someone from China? It's not like you can afford to compete with these buyers.
Read 23 tweets
1/ "The global credit machine is grinding to a halt." That's why fin mkts are seizing--China was the marginal source of credit creation globally for yrs, & fin mkts depend on credit creation to keep prices high. Price discovery has been distorted for yrs. creditbubblebulletin.blogspot.com/2020/02/weekly…
2/ As usual, my Saturday☕️ includes reading Doug Noland's #CreditBubbleBulletin--he has carefully chronicled colossal credit bubble for years. Historians will view his contrarian work as invaluable to understanding why things happened as they did, & not as mainstream predicted...
3/ A few nuggets I've concluded from experience+yrs of reading Doug & others who truly understand what's going on:
* Big banks aren't well-capitalized enuf to handle this; shld be raising equity capital FAST. This was clear last Fall during #repo scare--long b4 #coronavirus hit
Read 8 tweets
It seems like a good time to remind everyone, why we are heading into an economic crisis.

A thread on the fragility of the global #economy.

There, naturally, is no other place to start than this.👇 1/
@CNBCJulianna @KellyCNBC @SaraEisen @GeoffCutmore
Yet, everything begins from the GFC.

Like we noted in a blog published on the 10th anniversary of the failure of Lehman Brothers, very little has actually been fixed in the global financial system.👇 2/
gnseconomics.com/2018/09/14/10-…
While the US banks are now bigger than before 2008 crisis, the biggest problems lay in Europe.

The European banks remained under-capitalized and filled with toxic assets, and the policies of the #ECB made everything worse. 👇 3/
gnseconomics.com/en_US/2019/10/…
Read 14 tweets
1/ GREAT NUGGETS of wisdom from Doug Noland's post...gets me thinking on Saturdays☕️. FIRST, is #coronavirus just usual media fearmongering or a tragedy that could prick the huge credit bubble? Just
as banks can stay liquid LONG after they're insolvent... creditbubblebulletin.blogspot.com/2020/01/weekly…
2/ ...entire economies can stay afloat long after their balance sheets are used up too, as long as credit keeps flowing. Credit capacity for most of the developed world is mostly used up (it's why interest rates are negative in many places), but they're still afloat. Why?
3/ ...Because no event has yet triggered a reckoning that reveals the insolvency. (Again, banks can stay in biz for a long time after they're insolvent.) Markets clearly worry that #coronavirus might be such a trigger--Doug details the huge mkt moves this week in reaction to it.
Read 18 tweets
Let us briefly #Reflect on the #SARB's first #MPC #Meeting of 2020 and their #MonetaryPolicy decision to cut rates by 25bps from 6.5% to 6.25%...
Everyone with some interest in such matters is without a doubt already aware that the #SouthAfricanReserveBank's #MonetaryPolicyCommittee cut its key #PolicyRate, the #Repo by 25 basis points from 6.5% to 6.25%. The move can perhaps best be summarised by the following statement:
It is clear from the statement above that the SARB moved on the back of a growth story. They would want to see the level of #inflation creep closer to 4.5% but they didnt tighten to achieve this end. Rather, they provided more accommodation for growth & inflation might pick up...
Read 11 tweets
I know it's difficult to grasp of what's about to hit with the #StockMarket constantly reaching all time highs, but so it did, e.g., in 1929.

Here are some of our latest works to explain, why 2020 is the year when we fall into the next crisis.
Thread 1/
gnseconomics.com/en_US/2019/12/…
In August, we detailed, why central banks have become a threat to the #economy .

"The exceptional measures of central banks were crucial in the acute phase of the crisis, but [...], they turned into a serious and dangerous drag on the global economy."
2/
gnseconomics.com/en_US/2019/08/…
In September, we explained why the turn to massive monetary easing is unlikely to reinvigorate the real #economy.

"the [...] economic downturn did not start as a result of trade issues, but rather from the diminution of massive Chinese debt-stimulus." 3/
gnseconomics.com/en_US/2019/09/…
Read 12 tweets
I promised that we'd publish a new #Repo -blog today, with some "breaking info". Unfortunately, we discovered an error in the background info, which trashed the basis of our argument.

What we were trying to explain was this. 👇

Thread 1/
@Amdalleq @BradHuston
After the #Fed started its #repo -operations, #StockMarket has been in state of relentless melt-up.

As suggested by @zerohedge , hedge funds have been likely to use repo to increase their leverage.

But, what have the new repo-ops caused? 2/
zerohedge.com/markets/fed-wa…
Like nicely elaborated by @bondstrategist , they have at least "thrown the moral hazard out of the window".

The #Fed is guaranteeing liquidity in the #repo -market, which basically removes all the risk, at least, in the markets of short-term paper. 3/
Read 13 tweets
It's rather baffling, why so many think that #recession of 2020 could be avoided.

Yes, the #Fed has cut rates aggressively and started to support the #stockmarkets and hedge-fund leverage, but it will not save the real #economy. 👇

#recession thread. 1/
gnseconomics.com/en_US/2019/12/…
We first warned of the impending #recession in March 2019. Then, before the aggressive rate cuts and Not-QE, the timeline for its onset was Q1 2020.

In our recent forecast, the onset has been postponed between Q2 and Q3 due to the aggressive stimulus. 2/
gnseconomics.com/en_US/2019/03/…
Why so little has changed in our forecast?

First, it should be noted that the #repo -panic of the #Fed was justified. It's evident that there are serious problems in the financial plumbing.

Without Fed's swift response, we'd be in recession already. 3/
gnseconomics.com/en_US/2019/12/…
Read 19 tweets
So, why the collapse (not a recovery) of 2020?

1) There has not been an actual "recovery".
2) China running out of road.
3) Extension of the cycle through bailouts, alone.
4) No one left to "pivot" (bailout the markets).

Thread. 1/
gnseconomics.com/en_US/2019/12/…
I've been raising this graph several times.

Yet, some try to disregard it's message, which is extremely simple: global productivity growth has collapsed.

The most likely reasons are the growing share of zombie corporations and extremely low interest rates. 2/
The 'megalomanic' debt-stimulus, #China enacted in 2015-2017, effectively emptied China's coffers.

Corporations, households and banks have become such highly indebted that their ability to absorb more debt is gravely limited. 3/
gnseconomics.com/en_US/2019/11/…
Read 10 tweets
Many are hoping for a "recovery of 2020", but unfortunately we're going to the opposite direction.

In our latest forecast -report, we detail the reasons why. 👇

Everything starts with from the notion that tremors in the credit markets have started. 1/
gnseconomics.com/en_US/2019/12/…
Both the collateralized loan obligation (CLO) and leveraged-loans markets have been "acting out" since summer.

For example, the leveraged loans market was hit with a deluge of downgrades, exceeding upgrades at a pace last seen in 2009. 2/
wolfstreet.com/2019/11/04/lev…
Moreover, the IMF warned that in a global downturn, corporate debt at risk of default would rise to $19 trillion in eight major economies.

So, it's no wonder that there have been jitters also in the junk bond markets, while they have subdued lately. 3/
forbes.com/sites/mayrarod…
Read 11 tweets
I've written on this few times before, but I just cannot help it.

It's truly strange how analysts and economists keep making predictions about "stable growth", while we've been in constant state of central bank induced bailouts for over two years.

Why the complacency? 1/
The first two bailouts are not generally acknowledged, but they were important.

In November 2017, the BoJ and PBoC stopped the rout in the junk bond ETF:s that threatened to spread to the asset markets.

This went mostly unnoticed, like the following bailout. 2/
@GeoffCutmore
In March 2018, the #ECB was forced to bailout European corporate debt markets that became clogged due to over-issuance, as corporations were preparing for the end of QE and rise in interest rates.

The BoJ also participated by increasing its stock ETF purchases. 3/
@oliviabvoz
Read 10 tweets
#fed #repo #dollar #dxy thread w/ a couple new points about timing/catalyst related to cash repatriation and buybacks.
Issue 1) Widening $1T fiscal deficits are causing large supply of UST at unprecedented % of GDP outside of recession/war.
Issue 2a) In last five years, foreign sources and Fed not buying UST. Private domestic balance sheets (blue line) have thus absorbed $3T in new UST in those five years.
Read 9 tweets
I did Powell this AM, so might as well do the mins now. Thread 1/x
There's this ongoing discussion among #FOMC about deterioration in conditions. I'm really not seeing it...but my opinion doesn't count for as much. "Many participants" means it's a majority opinion of voters. 2/x
The ongoing labor market slack argument, advanced most prominently by @neelkashkari and @Jamesbullard (prolly not his real handle) gets a little attention, but not much. Can't employ everybody. 3/x
Read 14 tweets
@ObiWanKenoBit @zanepocock @mrcoolbp @thibm_ @Tom_Harned @alphaazeta @MartyBent @matt_odell @BlockFiZac 1/ Yep—agree, @zanepocock, great job with the thread. A couple things: #rehypothecation **is** fractional-reserve banking by another name. FRB is typically associated with money (+ a central bank), but the exact same thing can happen w/ any asset (eg, a claim to #bitcoin, a loan
@ObiWanKenoBit @zanepocock @mrcoolbp @thibm_ @Tom_Harned @alphaazeta @MartyBent @matt_odell @BlockFiZac 2/ ...collateralized by #bitcoin, US Treasury bonds, Apple shares etc). Rothbard wrote that the only legit form of govt action was to ban FRB—were he alive today, we would have been screaming about #rehypothecation too bc it has the same effect—it distorts the price of money...
@ObiWanKenoBit @zanepocock @mrcoolbp @thibm_ @Tom_Harned @alphaazeta @MartyBent @matt_odell @BlockFiZac 3/ ...(ie, it distorts the interest rate). One beauty of #bitcoin is that it’s a pure experiment in free banking. No govt controls the base money, so all excess/phantom claims to it are created privately by intermediaries—hence, a pure experiment in free banking. It’s a great...
Read 7 tweets

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