| Author | Source |
|---|---|
| u/HODLTheLineMyFriend |
Latest from the NY Fed Desk, $479.5B in reverse repo treasury lending with 50 counterparties (link). Down by only 1%, counterparties unchanged. R2 value still at 0.95 on the curve. See below for what this means and how it might relate to GME.
I think, given recent DD (including today’s from u/c-digs), that this is either a) banks getting handed too much cash and trying to get it off their books overnight by turning from a liability (customer cash) to an asset (Treasury), or b) banks lending these Treasuries to hedge funds to improve their collateral and avoid margin calls. Or maybe a combination of both.
Linear match improved, with R2 of 0.927:
Quick reminder: there is no $500B cap on Reverse Repo treasury lending. There is, however, an $80B limit per participant, so individual banks may start ‘running out’ of Treasuries to lend onward to their hedgie friends, if that is what they are doing.
Useful links
Yesterday’s chart: https://www.reddit.com/r/DDintoGME/comments/nmcn1e/reverse_repo_overnight_lending_chart_update_for/
DD into Repo/Reverse Repo for those who are curious: https://www.reddit.com/r/DDintoGME/comments/nlbsgy/the_fed_repo_market_and_overleveraged_equities/
Some DD on the true limit of the reverse repo by u/BlindasBalls: https://www.reddit.com/r/DDintoGME/comments/nkmoi9/response_to_the_post_about_the_reverse_repo_limit/
Helpful/hilarious explainer on the Reverse Repo situation: https://www.reddit.com/r/Superstonk/comments/nixxvc/fed_is_in_a_pickle_economy_is_fuk_edition/?utm_source=share&utm_medium=ios_app&utm_name=iossmf
Where’s the cash coming from? DD on possibility of many people getting out of equities: https://www.reddit.com/r/Superstonk/comments/nmxmri/clearing_up_the_fed_reverse_repos_and_what_it/
Keep on HODLin’, friends! 🚀🚀🚀