Repo Fail Swarms Are Back - Shadow Money Warning [Eurodollar University, Ep. 199]
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- Опубликовано: 18 окт 2024
- Repurchase agreements are short-term collateralized loans made amongst banks. What happens when one party refuses to return the collateral? It's a "fail". They happen in swarms during unhealthy monetary conditions. They're happening now.
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One guy with kamasutra and other with empty frames behind his back has better insight than 98% of professional financial news.
98% is too conservative.
This is the funniest comment I have seen in a while. Bravo 👏
Those frames aren't empty, look closer.
@@anthonycook958 now I understand why watching this video give me the high
Those frames are filled with fine sapele, gifted from the ancient hearth of a tribal medicine man. The soul of the old ways live in that wood.
I agree with Jeff that there soon wil be a dollar shortage - when (not if!) the Eurozone will disintegrate and capital flight and safe haven demand from Europe will prop up the US dollar, drive US bond prices up/ yields down.
But then Jeff should start talking about the fragility of the Eurozone, the debt accumulated particularly by the Mediterranean states and the sanctions and turmoil that are being created as reaction to the war in Ukraine; and of course about the sovereign debt crisis in Europe (Eurobond prices down, yields up).
Spoken like a Hecht rather than a Karpfen
I feel like this is my secret information network to the money system. Jeff and like Groman are legends
Great update - Thanks both. The things happening out there are becoming visible thanks to you guys shining a light in the monetary shadows. Can’t thank you enough.
“I feel a little dizzy” said Orion. “But also wonderfully elated. I feel that I am on the verge of finding a rhyme for the word orange.”
“Oxygen deprevation.” said Foaly “Or maybe it’s just him”
Emil and Jeff: Huge fan here with an idea. Could you guys do one or a couple of episodes on how the ECB differs from the FED when it comes to repo market, QE, monetizing government spending and why Italian/Greek bonds are not tanking in value. I would love this. Maybe in collaboration with MacroAlf?
I really miss the Emil bedtime stories. I listen to these videos often to help me fall asleep. However, I really miss the frequent videos where Emil would simply read someone else's paper. Sounds weird surely, but it's helped me learn more than I ever expected. It's much more efficient than counting sheep.
Thanks timely
Hey, Emil! I appreciate the way you groom your eyebrows😊
Don’t think we don’t see the Kama Sutra in the back. Well played sir, well played.
I’ve had to make it very obvious because it was up there for a while. Will put up erotic drawings next.
The more I watch this show, the more confused I become 🤪
Stick with these guys. They will disabuse you of the nonsense narratives being pushed by the CB's and mainstream financial media. And make you laugh.
Your missing one key component - the short sellers borrowed something the security lender really didnt have or has one but rehypothethicated that item multiple times over. The collateral shortage is the main driver for security lending fraud. Also, there are tri-party repos and your right its mostly done on offline internalizes (sometimes called dark forest, ping pools, - what the kids today call dark pools). And repo fails are similar to failure to deliver in stock market - SEC reports equity FTD's and OCC should report repo FTD's. And buy backs from shorts - which is the mechanism - is driven by margin calls that their lender executes. And the Dalio, Fink. and Griffin crowd have no idea where money comes from - they are running more evolved Madoff like operations and they have confused their algo cheat codes and offline digital market architecture with fundamental market knowledge.
Where do you guys learn this stuff from? Are you a securities broker?
Just watched the movie “margin call” isn’t this what caused the real estate crash in 08?
Thank you.
Great!!!
Great Analysis.
I disagree on one major point although maybe it's semantic. The end game is still inflation (but only price inflation, still deflation in terms of real output and productivity). Because the response to the coming deflation is that, the FED is going to be forced to print to the moon anyway, because if tax receipts go down, the Central government is more insolvent than it already is (Luke Gromen lays out this argument pretty well). So I think the biggest money printing is ahead of us and it's going to be fiscal which will be a) actually stimulative b) inflationary from a price perspective
So I agree with the deflation narrative if we are talking about real output, but strongly disagree if we are talking about price level
Kindly I suggest to add subtitles in English for those like me, which it is a second language. For this very technical and complex analysis subtitles could complent the understanding of it. Thanks anyway for a very informative video.
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Tap the podcast window while it's running, then tap the little gear ⚙️ to select subtitle language.
Sounds like the euro dollar system is much like real-time supply and logistics. Great and efficient when everything is humming along smoothly, but because of a lack of resilliency, just a little kink anywhere along the line and you get negative feed-back cascades.
I might be off but didn't Jeff basically say a repo is really a short sale?
I really think it's the other way round a short sale is really a repo (naked shorts excluded)
What can the original 'owner' do while the contract is in place? Not rehypothecate right
What can a purchaser of the short do?
It's really a repo ie a forced repurchase and return agreement
Love the content
Love your channel. But gosh I wish to have your view on coming few months
How debt that is issued by the US Federal government can be considered "pristine" is beyond my comphrehension.
You guys need to double up on your episodes! Need MOAR Jeff and Emil.
This reminds me of Perry Merhling's "The New Lombard St."
It's not the lapels they're grabbing you by, Emil... ;-)
Does the Fed keep track of these repos?
Whats your thoughts on Jon Stewarts video with SEC Rob on exposing how insiders cheat the stock market?
So what is good deflationary play? Cash? Bonds? investments that pay your with more valuable dollars downstream?
You guys are so good at explaining what happened and totally lousy at explaining what is going to happen….
Have you guys ever thought about doing a podcast form of a show, a little more loose on the format. I’d like and I’m sure a lot of other people would like to hear those conversations. Just throwing it out there
You mean just chit chat? Talking about the ultimate issues of life? Foreign affairs? National politics? News?
Maybe Emil can share his thoughts on money from perspective of beers drinking. Hahaha.
Stupendous, great,...
Depressing.. so Sad Jeff.
I saw a lot of mortgage bonds are failing in the repo market. No one wants their hands on MBS 🤔?
Isn’t it only “not inflationary” if the CBs don’t (once again) print to prevent a debt collapse?
Ha, and The Princess Bride! Jeff’s frames aren’t usually empty.
OMG Emil is so adorable and smart!
The lack of overall market transparency is alarming, I wonder if they future holds a more transparent look into money markets to better risk management in the system overall and thus efficiency
Correlation is not causality but agree with the sentiment
My bet-the price of anything you can't eat plummets, the price of anything you can, to the moon.
Contrary to many naysayers (including Fed chair Powell) the Quantity Theory of Money and the Equation of Exchange predict future inflation and history shows incredible correlation to actual inflation.
So we are headed for serious deflation, but we have to go through some serious CPI inflation first? But then won't the solution to the deflation be money printing to the moon?
I stopped to think about it again!
Leaving out the you two and U2 comments because that would also be additionally redundant, too, as well.
Loverly Emil loverly...
cough palafox/citadel cough
My flash that opening quote needs to be on every front page, every meme on finances ... just sayin' 🦕
Didn't realize Collateral for Collateral was a thing.
This dude seems like a Cathy Wood follower whose stock is down like 80% from its very recent high. Dude with undershirt needs to read Milton Friedman
How long until a broad market crash? Days, weeks or months?
Hi Emil, A heathy man needs to have a elastically functioning bladder, so do the global monetary system. Right?
Won't the Fed standing repo facility help mitigate some of the fails?
If Jeff is right and the repo fails of September 2019 were a matter of having too little quality collatorial, then could that particular spike in the repo market be a result of SoftBank's bets on WeWorks and Uber going bad? Don't know that SoftBank had enough direct investment in those two startups to cause the repo market to hiccup, but the deriative market on SoftBanks' bets seemed rather frothy.
What has Kama Sutra got to do with monetary policy?
Emil, if you wanted to show somebody a video of someone saying many words without actually saying anything… Which Alan Greenspan clip would you show them?
Expert trader Edward Rowe and I spent 10 years in a Turkish prison. Nice guy but keep him away from camels when he starts drinking
Did Jeff just say inflation is going away?
@@joeyjoejoejrshabadu then what is the reason for high prices in the grocery store? I own a small business and my costs have increased 30% in the last year. Pulp, labor, fuel all up. That’s deflation?
@@joeyjoejoejrshabadu Basically, total demand hasn't really gone up, supply is just way down (?)
@@joeyjoejoejrshabadu okay well this I understand. Thank you for taking the time to explain. I will keep watching and learning.
In a multiquadrillion eurodollar situation, quality of collateral ceases to matter. You're analogizing to an irrelevant situation.
Quality of collateral ceases to matter until it does matter. Mortgage Backed Securities demonstrated the matter of collateral quality.
@@anthonycook958 No, that was a result of a collateral bottleneck, not the result of collateral quality. All the so-called effects of a collateral bottleneck, appear to be quality of collateral. But that is a mirage. In a multiquadrillion eurodollar system, quality of collateral has no factual existence. It is a myth that quality of collateral exists. That concept is a baby's security blanket
@@johnryskamp7755 Mortgages that could no longer be paid imparted a quality issue on that collateral.
... and to be clear, I agree that the bottleneck negatively impacted a fragile system.
@@anthonycook958 The Eurodollar IS the system. It doesn't exist as a separate entity. It IS the entity. Think about this: mortgages are expressed in dollars, but according to Emil there are only eurodollars. So mortgages are simply not collateral. What are they? Nobody knows. So you have to change your thinking and stop thinking a MIRAGE is a FACT. Focusing on collateral simply ignores the fact that it is a placeholder in the Eurodollar system. All collateral is expressed in dollars,, but there are no dollars,, only eurodollats. Conclusions? There is no collateral. It is a null set. As long as you can utter the word collateral, you're good to go--there isn't in fact anything else but that word. And the value of that word is $0. If collateral ever existed, it has been obliterated and replaced by time. Time is everything, collateral is nothing. Just look at the facts. If Emil could give us direct measures of the multiquadrillion eurodollar, instead of these damn fool proxies, you would see that in fact there is nothing but the operations of the eurodollar. Nothing. You are fixated on the dollar. There is no dollar.
Great episode. But why the quick good bye?
Do you guys change outfits and record another episode? I am just kidding.
CDS back again?
Credit default swaps? I am not sure. To be determined. Commodity collateral failures? Commodity house failures? Contagion? To be determined.
so tbills are "going to the moon"?
I literally don't lose my funds to the trading market again, all thanks to the genius Edward Rowe for accepting to trade for me.
First!!!
Given the continued socialist / tyrannical leanings in the global economy entrepreneurship should be supressed and fiscal spending should continue....
Capitalism is not socialism.
@@NikolaiRay keep telling yourself that. It is capitalism, you just don't like the outcomes of capitalism so you lie to try and pretend it is socialism (which is workers controlling the means of production, clearly not anywhere in the world). Capital controls all, but that isn't capitalism?