Category Archives: Never say r-word (repo)

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London’s Financial Times is key to understanding repo and U.S. default

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Early next year, when Congress once again threatens to default on U.S. debt, you will need to have a subscription to the Financial Times to get timely information about conditions in the repo market, which is where the danger lies. … Continue reading

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WSJ steps up its repo coverage

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With no repo reform on the horizon, the European financial crisis threatens to erupt into a full-blown panic, Wall Street Journal reporter Kelly Evans wrote last week. While this is not news to RepoWatch readers, it’s big news to readers … Continue reading

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FT: Volcker rule may exempt repos and securitization

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Repos and securitization, the combination that nearly destroyed the credit markets and the U.S. economy in 2007-2009, will not be prohibited by the Volcker rule, according to the Financial Times. The Volcker rule is intended to limit proprietary trading at … Continue reading

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Bloomberg details Fed’s three-year bailout frenzy

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Bloomberg News has given us a stunning picture of the frantic efforts by the Federal Reserve to save the credit markets between August 2007 and April 2010. The report doesn’t mention the R-word (repo), even though fear for the repurchase … Continue reading

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Repo makes the headlines, but similarity to 2008 rarely noted

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The news wires are flooded with stories using the r-word (repo). This is great news. RepoWatch is stoked. Suddenly, it seems that everyone in the financial markets is worried about the repurchase market,  because of the debt-ceiling stand-off in Washington, and … Continue reading

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FT: A U.S. default could threaten world’s ‘plumbing system’

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Finally we have a news story from the mainstream business press that explains the potential dangers of a U.S. default. Congratulations to the Financial Times for its consistent, clear reporting on the repurchase market and for not being afraid to … Continue reading

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Doubt cast on key tri-party repo reform

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Three years after the financial crisis, Wall Street banks still have not fixed one of the most dangerous flaws in the markets, and they said July 6 they will not be able to meet an October 2011 deadline for reform … Continue reading

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Press reports unclear on dangers of Greek default

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Last updated June 26, 2012 Commentary From the editor: The main reason world finance officials want to prevent Greece from defaulting on its debt is the same reason U.S. officials bailed out the investment banks in 2008:  To prevent a … Continue reading

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Commentary: Movies ‘Inside Job’ and ‘Too Big To Fail’ entertain but don’t explain the panic

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From the editor: The new financial-crisis movies “Inside Job” and “Too Big To Fail” are riveting tales of Wall Street and its giant banks, but don’t expect to find out why taxpayers were forced to bail out those big banks … Continue reading

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Some experts are comparing Greece to Lehman

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If eurozone officials decide Greece does not have to repay its debt in full, the European Central Bank says it may stop making repo loans to financial institutions that put up Greece’s debt as collateral, according to a June 10 story by the … Continue reading

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Repos seem secret because U.S. reporters rarely cover them

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Reporter Bob Ivry at Bloomberg told his readers May 26 that leading bank companies borrowed $80 billion at sweetheart rates during the financial crisis from an emergency Federal Reserve lending program that has not been fully disclosed. Not so fast, … Continue reading

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Commentary: Let’s get going on the real story of the financial crisis

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From the editor: RepoWatch’s main purpose is to help professional and citizen journalists start covering the U.S. repurchase market, by bringing together many repo resources in one place and making it easier for beginners to get started. To that end, … Continue reading

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Money market funds, top repo lenders, may need more reform

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 Three years after the financial crisis, officials are still trying to figure out how to fix money market funds. The Securities and Exchange Commission conducted a round table in Washington, D.C., on “Money Market Funds and Systemic Risk” May 10, to see … Continue reading

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The underbelly of securitized banking is emerging

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The underbelly of securitized banking is showing, as investors and traders fight over the scraps left after the financial crisis of 2007-2008. One battle that has gotten media attention is a class action against JP Morgan Chase, where pension funds that were clients … Continue reading

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Repo fraud “happens all the time,” says convicted Farkas

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Securitized banking has its first 21st Century big-time crook. Lee B. Farkas, chairman of one of the largest privately owned mortgage lending companies in the U.S. when it collapsed in 2009, was convicted by a jury April 19 of a … Continue reading

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Thoma: “Critical vulnerabilities remain”

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Get ready for the next financial crisis, cautions University of Oregon economist Mark Thoma in his April 23 blog Economist’s View. That’s because we have not taken, and are not likely to take, the needed steps to prevent runs on … Continue reading

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WSJ: Securitized banking making a comeback with REITs

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Borrowing on the repurchase market to invest in residential mortgage-backed securities, which was the main systemic risk that caused the crisis in banking in 2007-2008, is making a comeback with REITs, according to the Wall Street Journal April 13. From … Continue reading

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WSJ: ‘Investors’ hot for riskier mortgage securities

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Investors are “climbing over each other” to invest in higher-yielding mortgage securities like those issued by PennyMac, which RepoWatch wrote about December 9, according to the Wall Street Journal April 11. These securities pay a higher return because they are … Continue reading

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RepoWatch: Reporters made mistake of letting ‘experts’ frame the crisis story

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Don’t let businesses and politicians frame the story for you, cautioned Don Barlett and Jim Steele, America’s most famous investigative reporting duo, at the annual meeting of the Society of American Business Editors and Writers in Dallas April 7-9. Sadly, … Continue reading

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Bernanke discusses clearinghouses but not tri-party repo

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Federal Reserve Chairman Ben Bernanke gave an important speech about systemic risk and the “plumbing” of the financial system April 4 and never mentioned the repurchase market. He especially talked about clearinghouses and clearing systems and their importance in managing … Continue reading