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: 3177
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: 1620
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: 3654
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!
User avatar
technovelist
Executive Member
Executive Member
Posts: 6017
Joined: Wed Sep 15, 2010 11:20 pm

Re: Cracks emerging in money markets?

Post by technovelist » 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: 2600
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
There's this very disturbing set of studies where about half the articles printed in Science and Nature magazines, the two leading publications, involved experiments that could not be repeated by anybody.
- Peter Thiel
User avatar
Smith1776
Executive Member
Executive Member
Posts: 1396
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.
PP: 20% KILO.B | 5% SBT.B | 60% VCIP | 15% VVL/VMO/VVO/VLQ
VP: 100% XGD
Liquidity: 90 Days of Expenses Bank Cash
Physical Bullion: 5% of Net Worth Gold & Silver
Knucklehead (noun): Someone who knows the expense ratio of everything but the value of nothing.
User avatar
shekels
Executive Member
Executive Member
Posts: 370
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
Junior Member
Junior Member
Posts: 2
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: 1396
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
PP: 20% KILO.B | 5% SBT.B | 60% VCIP | 15% VVL/VMO/VVO/VLQ
VP: 100% XGD
Liquidity: 90 Days of Expenses Bank Cash
Physical Bullion: 5% of Net Worth Gold & Silver
Knucklehead (noun): Someone who knows the expense ratio of everything but the value of nothing.
Post Reply