Monthly Archives: December 2010

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PennyMac and Citigroup: A mutual admiration society

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Citibank has agreed to make repo loans to PennyMac Mortgage Investment Trust, collateralized by $125 million in “distressed” residential mortgage loans. Check out the December 9, 2010, press release. It’s interesting to see one of these deals in action. This … Continue reading

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An interview with Yale professor Gary B. Gorton

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Yale University finance economist Gary Gorton discussed his theory of the financial crisis and the run on the repurchase market in a lengthy interview published in December by the Federal Reserve Bank of Minneapolis. In the interview, Gorton made the point … Continue reading

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Regulators delay rules to stop shadow bank runs

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Basel regulators said in a December 2010 report they will not soon adopt measures to deal with bank runs, like the repo run in 2007 and 2008 that triggered the financial crisis. Instead, they will phase in the measures and … Continue reading

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NYFed economists: Tri-party was surprisingly stable

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Fear for the safety of the tri-party repo market was a key reason for the Bush Administration’s bailout of the financial markets. Now economists at the Federal Reserve Bank of New York have issued a report on how that market … Continue reading

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NYU: Most of the leverage was in repos

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“Repo financing was the basis of most of the leveraged positions of the shadow banks.” From RepoWatch’s view, that’s the key sentence in “Regulating Wall Street,” a November 2010 book authored by New York University Stern School of Business professors Viral … Continue reading