Cracks emerging in money markets?

Discussion of the Cash portion of the Permanent Portfolio

Moderator: Global Moderator

User avatar
ochotona
Executive Member
Executive Member
Posts: 3353
Joined: Fri Jan 30, 2015 5:54 am

Re: Cracks emerging in money markets?

Post by ochotona » Tue Sep 24, 2019 6:57 pm

The Fed said they will inject liquidity until October 10-ish. So what happens after then???
Attachments
Liz Ann Sonders
Liz Ann Sonders
Screenshot 2019-09-24 at 9.01.14 PM.png (148.74 KiB) Viewed 19277 times
woman screaming at cat meme
woman screaming at cat meme
Screenshot 2019-09-24 at 8.58.18 PM.png (734.96 KiB) Viewed 19278 times
Kbg
Executive Member
Executive Member
Posts: 2815
Joined: Fri May 23, 2014 4:18 pm

Re: Cracks emerging in money markets?

Post by Kbg » Wed Sep 25, 2019 5:44 pm

Fuhget about it, it don’t mean nuthin.
User avatar
dualstow
Executive Member
Executive Member
Posts: 14232
Joined: Wed Oct 27, 2010 10:18 am
Location: synagogue of Satan
Contact:

Re: Cracks emerging in money markets?

Post by dualstow » Mon Sep 30, 2019 10:33 am

I hope Pug won’t mind if I add a WSJ link. Actually, the link in the OP is from the WSJ.

Fed Adds $63.5 Billion to Financial System in Repo Transaction
https://www.wsj.com/articles/fed-adds-6 ... 1569846438
Sam Bankman-Fried sentenced to 25 years
User avatar
dualstow
Executive Member
Executive Member
Posts: 14232
Joined: Wed Oct 27, 2010 10:18 am
Location: synagogue of Satan
Contact:

Re: Cracks emerging in money markets?

Post by dualstow » Tue Oct 01, 2019 7:32 am

MangoMan wrote:
Mon Sep 30, 2019 8:31 pm
dualstow wrote:
Mon Sep 30, 2019 10:33 am
I hope Pug won’t mind if I add a WSJ link. Actually, the link in the OP is from the WSJ.

Fed Adds $63.5 Billion to Financial System in Repo Transaction
https://www.wsj.com/articles/fed-adds-6 ... 1569846438
Why would I mind?
I thought you always asked for a non-paywalled alternative. I’m probably thinking of someone else, then.
Sam Bankman-Fried sentenced to 25 years
User avatar
shekels
Executive Member
Executive Member
Posts: 520
Joined: Sun Jun 02, 2019 9:01 am

Re: Cracks emerging in money markets?

Post by shekels » Tue Oct 15, 2019 10:59 am

When is QE not QE?
The new-new-new plan.


https://wolfstreet.com/2019/10/11/10-ye ... ury-bills/
¯\_(ツ)_/¯
User avatar
ochotona
Executive Member
Executive Member
Posts: 3353
Joined: Fri Jan 30, 2015 5:54 am

Re: Cracks emerging in money markets?

Post by ochotona » Tue Oct 15, 2019 2:54 pm

shekels wrote:
Tue Oct 15, 2019 10:59 am
When is QE not QE?
The new-new-new plan.

https://wolfstreet.com/2019/10/11/10-ye ... ury-bills/
Through Q2 2020. I wonder if they can really stop at that point.
User avatar
Tortoise
Executive Member
Executive Member
Posts: 2751
Joined: Sat Nov 06, 2010 2:35 am

Re: Cracks emerging in money markets?

Post by Tortoise » Tue Oct 15, 2019 6:39 pm

Sounds like a de facto standing repo facility, which the Fed proposed earlier this year.

If so, maybe at some point they'll just "make it official" and replace their current ad hoc repo market interventions with a standing repo facility.
User avatar
sophie
Executive Member
Executive Member
Posts: 1959
Joined: Mon Apr 23, 2012 7:15 pm

Re: Cracks emerging in money markets?

Post by sophie » Wed Oct 16, 2019 7:22 am

Oh of course. That would be because I just bought long bonds!
Libertarian666
Executive Member
Executive Member
Posts: 5994
Joined: Wed Dec 31, 1969 6:00 pm

Re: Cracks emerging in money markets?

Post by Libertarian666 » Sat Oct 19, 2019 6:30 pm

sophie wrote:
Sun Sep 22, 2019 8:42 am
77% repos? That's gone up since I last checked (was about 60%). Crazy.

I only wish FDLXX could be used as a sweep account. It's not that hard to keep shifting cash into it though. With the smartphone app I can do it while walking to work, or while stuck in boring meetings. I also have 3 sets of T bills on autoroll, and it looks like you can add to those positions anytime with the "buy" button. Pugchief have you tried that?
Thanks for this info, everyone.
Most of my Fidelity assets are in two sets of T-bills with autoroll.
I have just entered an order to move most of my "cash" (about 25% of my Fidelity account) from SPAXX to FDLXX, which should be executed on Monday.
User avatar
Kriegsspiel
Executive Member
Executive Member
Posts: 4052
Joined: Sun Sep 16, 2012 5:28 pm

Re: Cracks emerging in money markets?

Post by Kriegsspiel » Sun Oct 27, 2019 6:43 am

https://www.marketwatch.com/story/the-f ... 2019-10-25

This chart has vertical lines on it.

Image
You there, Ephialtes. May you live forever.
User avatar
Smith1776
Executive Member
Executive Member
Posts: 3505
Joined: Fri Apr 21, 2017 6:01 pm

Re: Cracks emerging in money markets?

Post by Smith1776 » Tue Jan 14, 2020 2:08 pm

Kriegsspiel wrote:
Sun Oct 27, 2019 6:43 am


This chart has vertical lines on it.
lmao.
🛞 The All-Terrain Portfolio 🛞
User avatar
shekels
Executive Member
Executive Member
Posts: 520
Joined: Sun Jun 02, 2019 9:01 am

Re: Cracks emerging in money markets?

Post by shekels » Wed Jan 15, 2020 10:56 am

Repo Market Simplified, or maybe not. :-\
Printing is always an option until it is not.
Jeff Snider has his opinion explained.


https://www.youtube.com/watch?v=w5AR-KBVgJ0&t
¯\_(ツ)_/¯
welderwannabe
Senior Member
Senior Member
Posts: 104
Joined: Sat Jul 20, 2019 12:53 pm

Re: Cracks emerging in money markets?

Post by welderwannabe » Wed Feb 05, 2020 1:38 pm

Im not sure there are cracks emerging in money markets. There are many theories on why this is happening. One is the concern about counterparty risk which really came to the forefront with the MBS crisis.

My theory is that is is more likely because the Fed started paying interest on reserves, both required and excess. The fed pays 1.6% right now on any reserves held with it. If a bank can just deposit with the fed and earn a guaranteed 1.6%, why bother with the repo market and take whatever limited repo risk?

They started paying interest on reserves to make it more palatable for banks to have higher reserves....making them stronger. However, this is a form of money tightening IMHO.

Therefore the Fed is stepping in.

Its definitely broken, but im not sure I would read in that there is a lot of risk in money markets now.
User avatar
Smith1776
Executive Member
Executive Member
Posts: 3505
Joined: Fri Apr 21, 2017 6:01 pm

Re: Cracks emerging in money markets?

Post by Smith1776 » Thu Feb 06, 2020 3:59 pm

I keep reading this thread title as something like "emerging markets money market funds".

And i'm like... why the hell would anyone buy something like that??? :D
🛞 The All-Terrain Portfolio 🛞
Post Reply