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1/ WOW-the Fed is looking to do a stealth QE5. I’d missed this but as usual Jeffrey Snider at @Alhambralnvest is on top of it + understands what it really means. Gee, ya think the Fed finally figured out WHY there are problems in the repo mkt—bc there’s... alhambrapartners.com/2019/03/13/the…
2/ ...only 1 real US Treasury security for every 3 owners whose brokerage accts show they own it (per IMF estimate)? It’s no shock why mkts periodically become illiquid when banks hoard claims on Treasuries (~2/3 of which aren’t real). The Fed needs a way to swap those claims...
3/ ...for something “real” when mkts seize & this is it—bank reserves. “Real” in quotes, sarcastically. The fact that this repo facility is on the table does, indeed, mean things aren’t quite right in fin mkts, as Jeff says. They never were. I suspect he’d agree. #rehypothecation
