Repo: How Roughly $1 Trillion Moves Overnight | WSJ

[@fournya]

The WSJ just called paying taxes “having funds sucked out of accounts by the fed” 🙄

[@marcpena3197]

That is literally what happens,

[@beardandbrew403]

To be fair the WSJ said it was being sucked into the Treasury, not the Fed. I think its important to note the distinction. I am not a Fed fan, but your quote is incorrect.

[@HusseinDoha]

@@marcpena3197 No. The banks just paid their taxes. By the way, quarterly tax bills are not that high compared to the volume of cash in daily repo-market.

[@HusseinDoha]

@@beardandbrew403 That's what the commentator meant. You didn't brought anything new. Quarterly taxes are paid to the treasury. The WSJ analysis is a bit for the birds. The quarterly tax bills for banks are not that high compared to the volume exchanged in the repo-market. And the liquidity problem lasted for couple of weeks. That reason is not convincing.

[@kanderson5555]

"Why did the Karens suddenly stop lending?" Because they needed to speak to the manager

[@Miii_Houp]

Didn't they gave 3 reasons? Two Financial Deadline and a Rule to keep banks solvent? ZeroHedge said it was JPMorgan crashing the Repo to get what they want, to deregulate and to do what ever they want again, and also get QE.

[@Dear_Mr._Isaiah_Deringer]

@@Miii_Houp it all seems a bit shady because those two were dates that didn't came out of nowhere.

[@zzlee79]

@@Miii_Houp my boss told me one unforgettable quote, "Christmas happens on every 25th Dec". Sorry, I don't buy the above 2 reasons. banks knows how much commitments and the timeline way in advance. the rule wasn't set yesterday. yes, the last one which is the JP's doing is one of the probable reason.

[@vincentconti3633]

@@zzlee79 the original JP was famous for manipulation of the markets! One tactic became known as the Friday afternoon crash!

[@YamamotoGenryuusai]

😂😂 ok get your like and gtfoh 🤣

[@smoothacceleration437]

How convenient when a whole industry has a specially dedicated government entity to bail them out every time they need it... Socialism for the rich.

[@noekahn2073]

except thousands upon thousands are dependent on the well being of these industries

[@davelowe1977]

Smooth acceleration Except that the fed is a private bank.

[@davelowe1977]

Sydney Austin ...therefore not a government entity.

[@keeganpaullanzillotta5584]

Thomas Daniels yes because gold has so much more intrinsic value. Our fiat currency enables economic growth at a scale impossibly with gold standard or other commodity currencies.

[@davelowe1977]

Keegan Paul Lanzillotta No it allows the debasement of the currency supply at a scale impossible with gold. Gold has value precisely because it cannot be printed - it keeps everybody honest.

[@JohnDoe-mx1sq]

Remember when this was only going to last for a few weeks?

[@JackEdward158]

I love the simplicity of WSJ explanation of financial concepts. Way to go!

[@raybod1775]

They don't tell the full truth.

[@westcoastflaneur]

@@raybod1775 do tell.

[@vihodanyet]

Too simple.. doesnt explain alot

[@TheLiamster]

Me: *Looks at chart* *STONKS*

[@nickyc1784]

Theres def a few banks that almost went broke but they wont tell us who.

[@greggascoigne941]

Nick Chungo They’re all broke, Fify!

[@hydrohedinvictus8697]

citi bank is one, friend of a friend couldnt pull cash out... why do you think that is? they didnt have any cash to give him!

[@victorarboleda8633]

Deutsche Bank is probably the bank. We will find out this upcoming spring

[@cayetanosoler3432]

@@victorarboleda8633 ....sooner than that !!

[@ngomaibinda]

Exactly

[@yomammaspoodle]

Oh nooo, poor innocent banks had to pay taxes.... Oooh cry me a river...

[@qinby1182]

In all fairness they proppably called it an unexpected event...

[@scotchy451]

without banks very few people would own a car or home.

[@KD-vg2yn]

scotchy451 that doesn’t excuse their corruption.

[@scotchy451]

@@KD-vg2yn Fair but demonizing banks in the way the left does now is very similar to what the nazi's did in the 30's

[@muntee33]

scotchy451 And were they wrong?

[@jaco_g6765]

Everything is fine. Its only one or two insolvent banks with a risk of default so high that no other bank would lend money to for a period of 24 hrs. Keep swiping those credit cards folks, Christmas is just around the corner.

[@ryanm2051]

Owen Gallagher just European banks tho

[@Truid312]

@@ryanm2051 All banks are pretty much chained together. One failing will cause massive stress to the entire system.

[@briansimpson6710]

banks short-stock trading themselves into negative returns to get more cash on hand... and then complaining that the reason they didn't have the cash on hand is because of new rules put in place requiring them to keep more cash on hand. It's almost as if banks are recklessly dealing with their funds in a way that is liable to destroy the financial system again.

[@raybod1775]

That's why we need the Glass-Steagall Act restored.

[@Je.rone_]

*Economic geniuses in this comment section* 💪🎭

[@Je.rone_]

@Muneeb Iqbal thank you for giving me the opportunity to clarify there were only two other comments when i made this comment... So I'm definitely referring to only those two and not the one's that came after it. That said. Did i say they were dumb, did i even paint them as dumb? I'd beg to differ, not being a genius doesn't make you dumb, but pretending that economics is not very very nuanced and complex seems imprudent as much as it may be inconsequential unless one has power to act upon it in a way they'll affect large group of individuals. In addition i never claim it even implied to be intelligent, I never claimed and do not believe i am of a higher intelligence, that said the two comments that were here upon my initial comment showed a lack of appreciation of the evident nuances and complexities of economics, of which i don't claim to understand or know fully myself, that said I'm acutely aware that it is indeed nuanced. That awareness in that particular instance doesn't make me more intelligent nor does it make be better than any one else... Also these videos don't get a lot of comments and views, relative to the subscribers so i figured it wouldn't be too many people who'd see it. 💪

[@connormcgowan2537]

0:27 How bankers think an Oiler works.

[@Dear_Mr._Isaiah_Deringer]

It's also a bit if an understatement what happened a couple weeks ago. Dumping a barrel would have been more proportional.

[@Anand-qb1wp]

Hah! Had to take a second look to see the handle was moving. Good catch!

[@justsaying7742]

Then just print cash, then they take your family home. Nice business.

[@niteshkumarpatel]

This is quality journalism.

[@WisdomIsPrecious]

Nitesh Patel not really. It’s a watered down perspective for sheeple

[@markgreen2170]

@@WisdomIsPrecious EXACTLY!

[@Marco-wz8xw]

LCRs exist in Brazil since 2002. It՚s also worth noting that even prior to implementing LCR requirements to the most systemically important banks in Brazil in October 2015, the Central Bank of Brazil has been monitoring the liquidity risk incurred by all the Brazilian banks on a daily basis since 2002. This liquidity monitoring process is performed by means of an indicator conceptually similar to the LCR denominated Liquidity Indicator (LI).

[@ManhwaMystics]

IMAGINE IF EVERY PERSON OR AT LEAST HALF OF AMERICANS WENT TO BANKS TO WITHDRAW MONEY AT THE SAME TIME

[@NikolasStow]

doc arham exactly the reason why banks need reserves.

[@Mr_Battlefield]

This would be something I would be willing to do just to see what would happen.

[@halvey8518]

Ahmad Haruman You should just watch a short documentary about the Great Depression because that’s what everyone did. All of the banks failed, and everyone lost their money. But today we’re FIDC insured. It would just be madness like always.

[@TobeornottooB]

Do you think half of Americans have money to withdraw?

[@Sjalabais]

So where are the feds 60 billion $ coming from? Reserves? Printing press? Magic wazoo?

[@forthepeople5066]

We'll go with Magic Wazoo in order to not frighten people with the Truth. They can't handle it. Lol

[@gabrielavila2884]

It's more elegant now. They can just type zeros into a computer and wazoooooooooo...!

[@forthepeople5066]

@@gabrielavila2884 Sheeeeeiiiitt. That's that computer Wazoo interweb magic!

[@adityamishra6252]

From the federal reserve. It's basically like transferring money from one of your bank accounts to another. They're just paying themselves

[@Kunalthemillenial]

Nice question ... please don’t go following the answer trail to this. !

[@alliffmuhamad]

Money & Macro brings me here, and..this is a good explanation of a 'quite technical things' in monetary topic, nice!

[@daybuttons7541]

So if banks stopped lending overnight because of 2 financial deadlines in the middle of sep 2019, why does the fed need to provide liquidity until q2 2020?

[@deure8572]

Oh I love this macro-economic lesson video

[@KimetsuNoYaiba100]

When I first watched repo crisis in the news in Sep 2019, I barely understood what had happened. Fast forward almost 3 years, now I'm able to grasp the full wiring of the financial system and how crucial repo market is.

[@rishiraje]

You should explain that at 1% repo rate, Mark would buy back the treasury at 100.00274 dollars the next day

[@andrewgrant2948]

rishiraje I wondered this too. Its a 1.00 APY

[@ChristopherWalkenPUA]

Just remember guys, QE4 is not really QE........... bwahahaha

[@alonezlciel]

So, FED bailout the bank again, but in different form?

[@bubblebreak4160]

AL Free money for the banks and richest investors

[@jaridkeen123]

The LCR needs to be raised. Also they should schedule payments better, this is the main reason that it happened.

[@IamTonyStark1]

This is more like s patient dying of a heart attack getting adrenaline shot, not lubrication .

[@Ceedee824]

Lol u dont get Adrenaline for a heart attack. Except your goal is to explode the heart. Which is what Fed is doing to the Economy.

[@sandman.38]

C.E.D. r/FUCKINGWOOSH

[@kimdejot]

Amazing video, FEDs participation in repo beautifully explained after I couldn't find it in any other source. Thank you!

[@TheObserver258]

I still don't get the part about how everyone is killing it on Wall Street yet the country is now $23 Trillion dollars in debt. Magic?

[@timsievers2067]

@K Kray, were pumping up the bubble and slapping band-aids to any potential tears, just to pump it even more. They stripped all the protections out of Dodd-Frank while keeping this jem, so that they can keep the next "incident" quiet. This is 2008 repeating all over again but they don't have to publically ask for a bail out.

[@vineetpatel8512]

Two different things? The 23 trillion dollars debt is at result of government deficits. The financial industry is doing good right as many people are using their services (money management, advising, IPOs, etc)

[@alidiaamkalaf653]

Daym, 35 already

[@oldworld6270]

Banks and their controllers have been our downfall since their inception.

[@foggymedia]

You forgot the most important point IT'S ALL JUST A GAME OF CHARADES!!

[@ki6eki]

Why don’t they just better manage their cash flow like any other business

[@bishboshs]

Because banks have tiny margins and therefore their capital needs deployed as much as possible to turn a profit.

[@KBTadieh]

I work at a bank, we don't manage cash, we MAKE cash. When will people learn

[@bishboshs]

@@KBTadieh Unless you work for a central bank you don't "make" cash.

[@Peter-wp5vb]

Not as profitable as the alternative

[@joshuarasmussen641]

@@bishboshs Money is quite literally lent into existence , listen to the bloke that actually works at a bank, instead of telling him your “false ideology of money.”

[@solohoh]

Looks like a game of musical chairs to me -- with real time warnings showing what happens when the music stops playing.

[@TheYoyozo]

This video is what you get when a newspaper turns to video production.

[@crispusattucks4007]

Every time she ends a sentence with a vocal fry, take a shot

[@boomsuga]

@whiteboardfinance is doing such a good job that wsj is taking his ideas

[@laidav]

Mark: "I got these cheeseburgers man...."

[@dhanapal2312]

It's hard to hide the truth for long time, Nature

[@rkan2]

Fortunately? Most people either don't have the time or the logic to understand it.

[@endthefed4816]

And Repo intervention is permanent as we speak! So I would love to know which Banks are in trouble!

[@victorarboleda8633]

Deutsche Bank

[@tidypog3272]

Which banks are in trouble? "Yes"

[@cliftonparchment4498]

I’ve always been curious how banks made money over night. Great educational video. 👍🏽👍🏽

[@bubblebreak4160]

Free money for the rich. Our entire “Everything Bubble” economy is built on free money handed to the very richest.

[@TJ-oo5mx]

Exactly why we need a free market, and why the government should be smaller

[@g_l_a_d3665]

Sadly the problem with free money is that is how much it will be worth once it is known that it is free.

[@gaatjeniksaan336]

so what is the repo market and how does $1 Trilion move overnight? O wait it was meant to be explained in this video

[@gaatjeniksaan336]

@Abraham Villalobos yes I heard something about 2 persons and that fed is pumping money

[@philipmolokwu9271]

@@gaatjeniksaan336 it's basically the stock market but for banks. People are no longer buying stocks so the Fed is taking their place. Basically.

[@gaatjeniksaan336]

@@philipmolokwu9271 where refers ''their'' to? to ''people who no longer buy stocks''?

[@keezer4346]

When billionaire bankers fail to manage their books, it tells me a recession is coming soon enough.

[@danstevens64]

Still waiting

[@ajitmistry5044]

Nearly there

[@primeminister87]

Ajit Mistry definitely here now . Who Would of thought a virus would kick it all off .

[@anshuanand90]

What a great content !

[@openmind5363]

So why does the amount of repos keeps going UP significantly ??..when it should be tapering off after their schedule financial statements & payments.

[@ThaRealERAQ]

That chart shows the banks stopped putting as much into those fed reserves over the past few years. They are intentionally doing this.

[@TreasureHunter-hf9ff]

So in your example a a 1% repo rate on a $100 paying $101 back overnnight is like a simple interest rate of 360% based on 360 periods a year. If I was to pay a bank loan at a simple rate of 1% on $100, my daily interest rate would be a fraction of a penny a day.

[@MsXfi]

Wheels just stopped turning.

[@oswaldocapriles9402]

These systems are complex and so elaborated that only their Gurus understand them , take advantage and rip off the unlearned and unaware 90% of the people .

[@svonkarmo433]

"Why did Karens stop lending?" -Because Karens are smart. Karens know exactly what the "real world" repo rate should be (read: the banks acted like a drunken sailors who so far never get arrested)

[@ShovelShovel]

Did you not watch the video? It's because of a mandate the govt required to have liquidity so they couldn't lend it out.

[@roderick7415]

Great video 👍

[@holycrapchris]

Did the fed *need* to step in? There's plenty of Karens on Main St willing to lend overnight at an interest rate of 50%.

[@vineetpatel8512]

Yeah 50% for an overnight lending is a great idea for a financial system.

[@___Truth___]

@@vineetpatel8512 🤣🤣🤣

[@rayxr]

That means the bank Karen was lending to was so insolvent that the risks wasn't worth it. Someone is on the brink of collapse

[@___Truth___]

@@rayxr From what premise are you saying they're insolvent? The video clearly says the Fed lends overnight and is paid back accordingly, banks doing that demonstrates that they're solvent. How does that imply a brink of collapse?

[@rayxr]

@@___Truth___ I'm saying there's a bank(s) out there trading with toxic assets, high liability, and low liquidity. They're trading and was able to pay overnight, yes, but what they're trading is fundamentally garbage. That's why other banks (Karen) knew not to lend. Because that low liquidity bank's financial practice is unsustainable. But since this toxic bank(s) got an injection, the Karens continue to trade with such toxic bank...for the time being.

[@jturner405]

Omg they need to keep that rule in place!!! Keep those funds on hold, thanks for this video

[@MayankSingh-qg4zv]

thank you aunty ji

[@robgoren8628]

Infinite Socialism for capitalists. Rugged individualism for wage slaves.

[@sp0rtbilly77]

BS on technical malfunction...it's new printed 💰

[@einseitig3391]

We should all still remember the part Repo 105 played in the financial crisis.

[@kevinkang4427]

This screams too much government intervention

[@scottwilliams895]

"The Fed" is definitely, definitively NOT "Government"

[@maman89]

The federal reverse is as federal as federal express. Its a central bank.

[@coder3101]

"I" in "Karen" stands for Intelligence

[@thunderb00m]

There is n...oh

[@ShaggyYoon]

i don't get it ...

[@normanoro206]

What the Fed's doing is kind of weird, but I think it's better for the banks to keep that cash in reserve rather than using it for repos. It may hurt their bottom line, but if it makes the financial system more resilient against shocks, it's worth it. Who knows when the next shock will happen and where it'll originate from (unfortunately, it is a "when" and not an "if")?

[@justsaying7742]

They just print more cash, then they come for your family home, that you thought you owned.

[@CommonCentsRob]

1:48 Wait, banks have a shortage of liquidity but an abundance of Treasury Notes? That doesn't seem right. I thought that banks didn't hold T-notes. Also, why do banks need liquidity in such large quantities?

[@CommonCentsRob]

Investment Bank Commercial Bank. Also, Treasury Securities.

[@alfrednewman292]

That is such an over-simplistic explanation that does not mention so many other things like fractional reserve banking that would put this all in perspective. And another very important factor is that of the theft mentioned were the treasury takes a certain cut by the pronouncement of these lawyers called legislators telling you how much you must give them to misspend and make them rich, you poor, effects this whole story. If the banks have all the money, then who owns the politicians? If everything you own including yourself, is valued in terms of a fiat currency, then what value is property?

[@drbatalaale9376]

Tell us who controls federal reserve.

[@trygveevensen171]

RIP audio

[@ACT1O1]

Need to get my hands on 1% of that

[@NotAP05]

is it possible for normal people to invest in the lendin part of repo ?

[@trygveevensen171]

The S's are painful

[@Steven-xf8mz]

banks always say "if we didn't have to keep all that money in reserve, we would have been able to pick it up" it must be a coincident that these very banks don't have any money during every financial crisis before the next one. LOL. if we relax rules, these money won't be in the reserve to pick up the repo market unless we mandate them to save more just for repo or allow them to use reserve for repo only.

[@skolarii]

Isn't it ironic that bankers are terrible with money?

[@luddity]

Will Fintech/automation replace all of those broken mechanisms?

[@cooper8t]

Question (for myself a newbie, go easy on me).. Would the cash reserves the banks are forced to hold by law ever match or come close to the amount borrowed in these short term "overnight" loans?

[@Ranjankumar-ey1zb]

Explanation of repo rate is very confusing . She didn't even explained reverse repo which I think was used here .

[@randylegare8405]

Everything is about to explode.

[@json809]

This isn’t going to end well.

[@JeepCherokeeful]

So why didn’t they see this ahead of time?

[@sleepysartorialist]

Karen became everything she hated: the manager.

[@sadiyamulla8067]

So in the US, Repo rate is only overnight?

[@Ohyeahhahaha]

From my understanding, it was the banks that needed to borrow, not to lend, but WSJ sounds the other way around.

[@ZappyOh]

End the FED.

[@patw.6567]

So banking doesn’t do the work it’s supposed to do

[@RAC91]

So recession in June of 2020???

[@dude101cool]

how'd you know

[@svss777]

If LCR was gone then welcome to another crisis like 1929

[@Elon..Musk.X]

Please don't cry. Please take my money

[@jeffbeowolf547]

So like me : too big to fail banks are broke but no one’s giving me free money

[@TacEsk8]

Karen needed to talk to the manager

[@timothy8142]

The "Karen's" stopped lending because they saw the collateral that "Mark" held as no good. So, the "Karen's" demanded substantially higher rates as a result. As lender of last resort, the Federal Reserve steps in and will accept anything as collateral. There is a reason why gold has become a tier 1 asset according to new Basel III rules. This is why. For the argument that the "Karen's" don't have the cash because of the reasons in the video above, the question becomes: How is there no liquidity at the top of a bull market? According to Trump: "Economy is great. Stocks are great." Someone is lying...

[@timothy8142]

To add to this video from October 29, 2019. It is currently January 15, 2020 and REPO operations are still ongoing. The video here has many problems and much false information.

[@DABA33]

So market crash will be July 2020?

[@XD152awesomeness]

You mean to tell me banks should be keeping money in their vaults? What a novel concept!

[@mgsp87]

How is this not quantitative easing all over again?

[@threedogsandacamper503]

The banks have to pay tax every quarter so it’s not as if this was a surprise for them....the surprise lack of liquidity must’ve come from another source...or perhaps the supply was normal and the demand was outsized (?)....

[@John-zh6ld]

Pull your money out now and be ready to purchase when it crumbles.

[@whong09]

Yes let's all keep the plates spinning a little longer. Have a slice of pie.

[@Dear_Mr._Isaiah_Deringer]

wait… there was pie? ←the 99.9%

[@Peizxcv]

Jerome Powell. When you hired someone for diversity without face to face interview.

[@ryanbmx5]

So banks are basically to the point where they risk over-extending themselves and they want to use their reserve money in the meantime? Makes total sense. Short on cash? Just keep dipping into your savings!

[@richarddelaguardia4026]

So Fed keeping expansion moving along.

[@smilo_don]

They make it sound like both Karen and Mark were completely unaware of the deadlines.

[@victorguillory5976]

So banks are living from pay check to pay check?

[@goodmorningfiatnam]

Keep buying bitcoin everybody, and eventually we’ll all be free from problems like this

[@aripson]

Buy Gold and Silver too..

[@GlobalGaming101]

Bitcoin is more volatile than silver or gold. It's not a safe place to park your money.

[@Guerrilla727]

Na I'm in silver, gold, and real estate rentals.

[@goodmorningfiatnam]

Guerrilla Gaming real estate rentals imo is a great investment too, but it’s not going to change currency and the banking system for the better in the future

[@goodmorningfiatnam]

Teringventje “HAHAHAHA” = “I have no basic understanding of economics, fiat currency or the fractional reserve banking scam. My ignorance on the subject only allows me to form a quick uninformed opinion which I will vocalize in the KZbin comment section as multiple ‘HA’s’. I can not grasp simple concepts such as if everyone stopped using one currency and started using another the previous monetary system would die along with its many evils. I also don’t understand that money just like everything evolves with the times. Surely the future will be just like the past. People used dollars before which means people will always use dollars so there is no need for an open source, peer to peer, unseizable, uncensorable, rare by design, decentralized, borderless digital currency that can be transacted with, bought, sold, and moved 24-7-365 for a very low fee anywhere on earth at the speed of the internet, transcends fascist government regulations or their ability to tax us with every purchase we make and protects us from inflation. How could that possibly succeed and compete against the good ole USD scam that I’m used to on a free market?”

[@tvojslauf]

Why don’t they sell their assets if they need money?

[@invisiblerevolution]

Good video....

[@carlton123456]

Isn’t the overnight banking system what also caused a systemic collapses across more than just the financial industry. Wasn’t the treasury they lent out MBS or CDOs?