Posted on 01/03/2023 7:36:46 AM PST by Kaiser8408a
There is something happening in markets this morning.
First, banks are stashing cash with the New York Fed on an “overnight basis” although it is looking pretty permanent to me. Repos (or repuchase agreements) soared to $2.55 TRILLION as of 12/30/22.
But this morning we see the US Treasury 10-year plummeting -15 basis points. As I used to tell my University of Chicago, Ohio State and George Mason finance students, any 10 basis point shift (plus or minus) is a big deal. Something is happening.
The 10-year Treasury yield plunging -15 bps is a “good thing” for the mortgage market in that US mortgage rates will likely follow suit and fall.
(Excerpt) Read more at confoundedinterest.net ...
Why in the world would someone lock in a 30 year for much less than a 6 month?
as of noon EST, the 10-year has slowly climbed to 3.8%. Equities have been, unsurprisingly, selling off since the market opened.
Interesting factor. So many owners of homes now are corporations / hedge funds / etc. They will prop up their own rather than go insolvent.
The “game” is rigged. Watching a show last night about the barons at the turn of the century. They buried their hatred of one another long enough to buy a president in McKinley and get rid of William Jennings Bryan. Rockefeller, Carnegie and JP Morgan preserved their monopolies in the face of the threat Bryan posed. Fink and Blackrock will do the same thing with whatever buddies they have by manipulating rates or whatever they have to do to cover their misadventures and make them successful.
Correction: they'll prop up their own at taxpayer expense rather than go insolvent.
Precedent: it happened for banks, automakers, pension funds, auto workers and more in 2008/2009.
The game is rigged against us taxpayers.
“It makes sure that some portion of the bank’s funds are not tied up more than 24 hours.”
Thanks.
The idea is to invest their cash to make a little interest, correct?
Why k8s it bad? The article doesn’t explain except ro say mortgage rates will go down and the article said that’s good?
Yes, you get some interest on these overnight loans, but basically the bare minimum (and only because they actually raised interest rates recently, for the last decade and a half it probably would have gotten zero return).
I thought it was understood that any bailout of themselves would be at our expense. It always is. Our labor is their benefit. We are just so much chattel.
The key for them is to use OPM to make themselves richer.
“Yes, you get some interest on these overnight loans, but basically the bare minimum”
Bottom line is that repos are done when lenders are too scared to invest longer-term, correct?
It will be the "Great Reset" being bandied about. Any nation willing to sign onto the "Reset" will have their debt wiped out, but have to give up their sovereignty in the process. It's all just part of the plan.
Because in 6 months or a year or 2 years the 6 month rate could be much lower.
Which is still basically a negative rate after you figure in inflation.
Yes.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.