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Your history should show something
OFFICIAL STOCK MARKET AND ECONOMY THREAD VOL. A NEW CHAPTER
- Thread in 'General' Thread starter Started by johnnyredstorm,
- Start date
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Shows nothing except my last transfer...I’ll keep it there see if it goes away if not I’ll spend it
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Been sitting on the sidelines and saw this oil play coming as soon as I saw the news about the drone strike, but couldn’t transfer funds fast enough 
.
.
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money from stocks that pay dividends?
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Seems like this largely flew under the radar, but overnight "repo" rates shot up the past two days due to a lack of liquidity. The New York Fed had to step in and buy $125 billion of Treasuries, essentially injecting the market with cash. Interesting. Could be a one-off situation, or could be pointing to bigger problems. TBD.
https://www.reuters.com/article/us-...d-has-a-repo-problem-whats-that-idUSKBN1W30EJ
Explainer: The Fed has a repo problem. What's that?
Richard Leong
6 MIN READ
(Reuters) - As if the U.S. Federal Reserve did not already have enough on its plate heading into its meeting on interest rates this week, chaos deep inside the plumbing of the U.S. financial system has thrown policymakers an unexpected curveball.
Cash available to banks for their short-term funding needs all but dried up earlier this week, and interest rates in U.S. money markets shot up to as high as 10% for some overnight loans, more than four times the Fed’s rate.
That forced the Fed to make an emergency injection of more than $125 billion over the past two days, its first major market intervention since the financial crisis more than a decade ago, to prevent borrowing costs from spiraling even higher. While the effort restored a measure of order to the short-term bank funding market, it was not enough to stop the Fed’s benchmark lending rate from rising on Tuesday above its targeted range of 2.00% to 2.25%.
The exact cause of the squeeze is a matter of some debate, but most market participants agree that two coincidental events on Monday were at least partly to blame. First, corporations had to withdraw funds from money market accounts to pay for quarterly tax bills, and on the same day the banks and investors who bought the $78 billion of U.S. Treasury notes and bonds sold by Uncle Sam last week had to settle up.
On top of that, the reserves that banks park with the Fed and are often made available to other banks on an overnight basis are at their lowest since 2011 thanks to the central bank’s culling of its vast portfolio of bonds over the past few years.
Added together, these factors are testing the limits of the $2.2 trillion repurchase agreement - or repo - market, a gray but essential component of the U.S. financial system.
Whatever the cause, the episode has added fuel to the argument that the Fed needs to take steps to avoid more disruptions in the repo market down the road.
ADVERTISEMENT
(GRAPHIC - U.S. repo rate: here)
WHY IS THE REPO MARKET IMPORTANT?
The repo market underpins much of the U.S. financial system, helping to ensure banks have the liquidity to meet their daily operational needs and maintain sufficient reserves.
In a repo trade, Wall Street firms and banks offer U.S. Treasuries and other high-quality securities as collateral to raise cash, often overnight, to finance their trading and lending activities. The next day, borrowers repay their loans plus what is typically a nominal rate of interest and get their bonds back. In other words, they repurchase, or repo, the bonds.
The system typically hums along with the interest rate charged on repo deals hovering close to the Fed’s benchmark overnight rate, which it cut on Wednesday to 1.75% to 2.00%, from 2.00% to 2.25%.
But when investors get fearful of lending, as seen during the global credit crisis, or when there are just not enough reserves or cash in the system to lend out, it sends the repo rate soaring above the Fed Funds rate.
ADVERTISEMENT
Trading in stocks and bonds can become difficult. It can also pinch lending to businesses and consumers and, if the disruption is prolonged, it can become a drag on a U.S. economy that relies heavily on the flow of credit.
WHAT HAS CAUSED THE DROP IN BANK RESERVES?
Coming out of the financial crisis, after the Fed cut interest rates to near zero and bought more than $3.5 trillion of bonds, banks built up massive reserves held at the Fed.
But that level of bank reserves, which peaked at nearly $2.8 trillion, began falling when the Fed started raising interest rates in late 2015. They fell even faster when the Fed started to cut the size of its bond portfolio about two years later.
The Fed stopped raising interest rates last year and cut them in July and again on Wednesday. It has also now ceased allowing bonds to roll off its balance sheet.
The question vexing policymakers now is whether those actions are enough to stop the downward drift in reserves, which are a main source of liquidity in funding markets like repo.
Bank reserves at the Fed last stood at $1.47 trillion, the lowest level since 2011 and nearly 50% below their peak from five years ago.
(GRAPHIC - Bank excess reserves held at the Fed: here)
FILE PHOTO: Federal Reserve Board building on Constitution Avenue is pictured in Washington, U.S., March 19, 2019. REUTERS/Leah Millis/File Photo
1. RUN SPOT REPO OPERATIONS
Through the Federal Reserve Bank of New York, the Fed can conduct occasional spot repo operations at times of funding stress, allowing banks and dealers to swap their Treasuries and other high-quality securities for cash at a minimal interest rate. It did this on Tuesday and Wednesday.
2. LOWER THE INTEREST IT PAYS ON EXCESS RESERVES
By making it less profitable for banks, especially foreign ones, to leave their reserves at the Fed, it may encourage banks to lend to each other in money markets.
3. CREATE A STANDING REPO FACILITY
Such a permanent financing program will allow eligible participants to exchange their bonds for cash at a set interest rate.
The Fed and its staff have considered such a facility, but they have not determined who qualifies, what would be the level of interest paid and the timing for a possible launch.
ADVERTISEMENT
4. RAMP UP BUYING OF TREASURIES
The Fed can replenish the level of bank reserves by slightly increasing its holdings of U.S. government debt. This comes with the risk that it may be perceived as a resurrection of quantitative easing rather than a technical adjustment.
WHAT DID THE FED DO?
The central bank lowered interest on excess reserves by 30 basis points, to 1.80%. The rate now sits 20 basis points below the top of the target range, compared to 15 basis points previously.
It also set its offering rate in the repo market at 1.70%, five basis points below the bottom of the new target range for the policy rate.
Reporting by Richard Leong; Additional reporting by Ann Saphir; Editing by Dan Burns, Richard Borsuk and Chris Reese
Our Standards:The Thomson Reuters Trust Principles.
https://www.reuters.com/article/us-...d-has-a-repo-problem-whats-that-idUSKBN1W30EJ
Explainer: The Fed has a repo problem. What's that?
Richard Leong
6 MIN READ
(Reuters) - As if the U.S. Federal Reserve did not already have enough on its plate heading into its meeting on interest rates this week, chaos deep inside the plumbing of the U.S. financial system has thrown policymakers an unexpected curveball.
Cash available to banks for their short-term funding needs all but dried up earlier this week, and interest rates in U.S. money markets shot up to as high as 10% for some overnight loans, more than four times the Fed’s rate.
That forced the Fed to make an emergency injection of more than $125 billion over the past two days, its first major market intervention since the financial crisis more than a decade ago, to prevent borrowing costs from spiraling even higher. While the effort restored a measure of order to the short-term bank funding market, it was not enough to stop the Fed’s benchmark lending rate from rising on Tuesday above its targeted range of 2.00% to 2.25%.
The exact cause of the squeeze is a matter of some debate, but most market participants agree that two coincidental events on Monday were at least partly to blame. First, corporations had to withdraw funds from money market accounts to pay for quarterly tax bills, and on the same day the banks and investors who bought the $78 billion of U.S. Treasury notes and bonds sold by Uncle Sam last week had to settle up.
On top of that, the reserves that banks park with the Fed and are often made available to other banks on an overnight basis are at their lowest since 2011 thanks to the central bank’s culling of its vast portfolio of bonds over the past few years.
Added together, these factors are testing the limits of the $2.2 trillion repurchase agreement - or repo - market, a gray but essential component of the U.S. financial system.
Whatever the cause, the episode has added fuel to the argument that the Fed needs to take steps to avoid more disruptions in the repo market down the road.
ADVERTISEMENT
(GRAPHIC - U.S. repo rate: here)
WHY IS THE REPO MARKET IMPORTANT?
The repo market underpins much of the U.S. financial system, helping to ensure banks have the liquidity to meet their daily operational needs and maintain sufficient reserves.
In a repo trade, Wall Street firms and banks offer U.S. Treasuries and other high-quality securities as collateral to raise cash, often overnight, to finance their trading and lending activities. The next day, borrowers repay their loans plus what is typically a nominal rate of interest and get their bonds back. In other words, they repurchase, or repo, the bonds.
The system typically hums along with the interest rate charged on repo deals hovering close to the Fed’s benchmark overnight rate, which it cut on Wednesday to 1.75% to 2.00%, from 2.00% to 2.25%.
But when investors get fearful of lending, as seen during the global credit crisis, or when there are just not enough reserves or cash in the system to lend out, it sends the repo rate soaring above the Fed Funds rate.
ADVERTISEMENT
Trading in stocks and bonds can become difficult. It can also pinch lending to businesses and consumers and, if the disruption is prolonged, it can become a drag on a U.S. economy that relies heavily on the flow of credit.
WHAT HAS CAUSED THE DROP IN BANK RESERVES?
Coming out of the financial crisis, after the Fed cut interest rates to near zero and bought more than $3.5 trillion of bonds, banks built up massive reserves held at the Fed.
But that level of bank reserves, which peaked at nearly $2.8 trillion, began falling when the Fed started raising interest rates in late 2015. They fell even faster when the Fed started to cut the size of its bond portfolio about two years later.
The Fed stopped raising interest rates last year and cut them in July and again on Wednesday. It has also now ceased allowing bonds to roll off its balance sheet.
The question vexing policymakers now is whether those actions are enough to stop the downward drift in reserves, which are a main source of liquidity in funding markets like repo.
Bank reserves at the Fed last stood at $1.47 trillion, the lowest level since 2011 and nearly 50% below their peak from five years ago.
(GRAPHIC - Bank excess reserves held at the Fed: here)
FILE PHOTO: Federal Reserve Board building on Constitution Avenue is pictured in Washington, U.S., March 19, 2019. REUTERS/Leah Millis/File Photo
1. RUN SPOT REPO OPERATIONS
Through the Federal Reserve Bank of New York, the Fed can conduct occasional spot repo operations at times of funding stress, allowing banks and dealers to swap their Treasuries and other high-quality securities for cash at a minimal interest rate. It did this on Tuesday and Wednesday.
2. LOWER THE INTEREST IT PAYS ON EXCESS RESERVES
By making it less profitable for banks, especially foreign ones, to leave their reserves at the Fed, it may encourage banks to lend to each other in money markets.
3. CREATE A STANDING REPO FACILITY
Such a permanent financing program will allow eligible participants to exchange their bonds for cash at a set interest rate.
The Fed and its staff have considered such a facility, but they have not determined who qualifies, what would be the level of interest paid and the timing for a possible launch.
ADVERTISEMENT
4. RAMP UP BUYING OF TREASURIES
The Fed can replenish the level of bank reserves by slightly increasing its holdings of U.S. government debt. This comes with the risk that it may be perceived as a resurrection of quantitative easing rather than a technical adjustment.
WHAT DID THE FED DO?
The central bank lowered interest on excess reserves by 30 basis points, to 1.80%. The rate now sits 20 basis points below the top of the target range, compared to 15 basis points previously.
It also set its offering rate in the repo market at 1.70%, five basis points below the bottom of the new target range for the policy rate.
Reporting by Richard Leong; Additional reporting by Ann Saphir; Editing by Dan Burns, Richard Borsuk and Chris Reese
Our Standards:The Thomson Reuters Trust Principles.
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- Oct 16, 2010
Repo rate story definitely worth watching. Very interesting developments. Fed cut rates once again today and Powell even hinted at restarting QE earlier than expected. Next major catalyst for markets will be the China trade talks scheduled for October.
Looking at the charts (specifically nasdaq) I see a big head and shoulders pattern on the daily/weekly chart but also a potential inverse head and shoulders pattern as well. On paper, barring any Trump tweets, markets *should* be able to make new highs in the next 2-3 weeks but it's hard for me to see it hold beyond that because I don't think any trade deal will actually be reached. Holding mostly cash for now.
Looking at the charts (specifically nasdaq) I see a big head and shoulders pattern on the daily/weekly chart but also a potential inverse head and shoulders pattern as well. On paper, barring any Trump tweets, markets *should* be able to make new highs in the next 2-3 weeks but it's hard for me to see it hold beyond that because I don't think any trade deal will actually be reached. Holding mostly cash for now.
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- Apr 30, 2011
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- Oct 16, 2010
I'm shorting the hell out of this thing going into October.
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- Jul 27, 2013
Anyone buying PTON?
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- Jul 20, 2012
Nope IPO’s have been getting killed out here except BYND and even the glory days of it being $200+ a share are long gone
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- Jul 20, 2012
Bruh Ameritrade is about to be $0 fees and .65 per contract Robin Hood has made them force their hands which they should have
It cost them .20 to execute a stock order but charge us +$4 to open an position and +$4 to close
It cost them .20 to execute a stock order but charge us +$4 to open an position and +$4 to close
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- Jul 27, 2013
IBKR better re-lower their fees to $0 from $1 as well
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- Jul 20, 2012
I think all of them will follow
They all were getting fat charging to execute orders
And Robin Hood exposed that
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- Mar 14, 2014
BOOM!
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sticking with Robinhood
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- Oct 16, 2010
H&S pattern playing out very nicely, short positions are printing money. Just like Q4 last year.
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- Mar 10, 2013
AAPL been doing big things this month.
I’m getting murked on these Canadian marijuana plays. I’ve been DCA’ing so if they can right the ships I’ll be okay but boy did I goof on Canapy and TGODF.
I’m getting murked on these Canadian marijuana plays. I’ve been DCA’ing so if they can right the ships I’ll be okay but boy did I goof on Canapy and TGODF.
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- Oct 16, 2010
This trade drama is hilarious. Complete mess.
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- Dec 23, 2009
Very tempted to take my profits on AAPL and call it good on them for now. Over 100% gains, dont see them holding an all time high very long, if they hit again, looming recession and possibility Trumps trade war/deals fall apart.
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- Mar 10, 2013
Yeah that could be a good call. I'm sitting at over 200% on mine but I don't think I'll ever sell unless it's for a downpayment on a crib or buying a business or whatever. If we hit $160's again I'll add more. These are shares I hope to have when I'm retired.
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- Dec 23, 2009
I mean, that's where I'm at once the housing market hits a downturn ? Hoping to have a healthy sum of cash at the ready.
Otherwise yeah AAPL is a forever stock.
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The housing market won’t be hurt anytime soon. 2008 won’t be happening.
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- Jun 9, 2012
I sold off all my AAPL. It is making me debt free in a week or so. Can't thank them enough. But I will rebuy next year when the price is right.
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Hoping NVDA can hit $200 tomorrow finally, but that’s being real optimistic given it tested $199 and closed at $194 today.
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- Dec 23, 2009
TSLA up 16% as of this post. Huge earnings surprise and a profitable quarter. Only going up from here, boys.
