Free Republic

Last Friday the Secured Overnight Financing Rate (SOFR), a repo rate serving as the Fed’s new target reference rate , jumped 6 basis points (6 bps, 0.06) to above the Fed’s target range. SOFR measures (www.newyorkfed.org/markets/reference-rates/sofr) the median cost of Treasury repo borrowing. The jump not only caught most people off guard, but got eerily little attention. It likely reflects several market factors and a little bit of unfortunate timing (not unlike September 2019), but to the former New York Fed group officer Mark Cabana (now at BoA), the context is simple:

Stephen Perkins, 39, was gunned down by cops from Decatur Police Department outside his home on September 29 in Decatur, Alabama. Police have said that a tow truck driver had attempted to repossess Perkins pickup when it is alleged Perkins pulled a gun on him, causing the driver to call 911. Surveillance cameras captured the moment Perkins was gunned down by responding officers, who fired eighteen shots at him. Appallingly, a driver from Allstar Recovery drives off with the dying man's truck as he takes his final breaths just feet away, with his final words said to have been 'help.'...

The jobs report and minutes from the Federal Reserve’s June meeting were the economic highlights of the week, but they are, respectively, a lagging indicator and old news. This column instead digs into the auto market, where there is an underappreciated ticking time bomb. Lucky Lopez is a car dealer who has been in the business for about 20 years. In recent meetings with bankers, where he bids on repossessed vehicles before they go to auction, he has noticed some common characteristics of the defaulted loans. Most of the loans on recently repossessed cars originated during 2020 and 2021, whereas...

Typically, banks make money by taking deposits at low rates and lending to borrowers at higher rates (car loans, residential mortgages, business loans, etc.), earning a spread. And bank deposits are usually less than the loans that they extended. Until April 2020. Nothing has been the same since Covid. This is really a unique time, since during the last recessions (2001 and The Great Recession) bank credit exceeded bank deposits. Banks can turn to The Federal Reserve at times like these. The Fed’s reverse repo program lets eligible firms, like banks and money-market mutual-funds, park large amounts of cash overnight...

We are in the wake of The Fed flood. And its not a half-step, but a flown-blown boogie. The Fed sold a record $756 billion in Treasury securities this morning in exchange for cash via overnight “reverse repos.” This was up by a stunning 45% from yesterday’s operations of $521 billion. There were 68 counterparties involved. Yesterday’s overnight reverse repos had matured and unwound this morning, to be more than replaced by today’s Fed Flood. The result? The Fed’s balance sheet tops $8 trillion! This is truly The Wake of the Fed Flood!

The Fed announced Tuesday morning that it would be establishing a repurchase agreement facility for foreign and international monetary authorities (FIMA) that have accounts at the central bank’s New York branch. Through the FIMA repo facility, other central banks and monetary authorities unable to make smooth trades in the open market will be able to temporarily liquidate their positions in Treasuries.

Support for critical market functioning. The Federal Open Market Committee (FOMC) will purchase Treasury securities and agency mortgage-backed securities in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy. The FOMC had previously announced it would purchase at least $500 billion of Treasury securities and at least $200 billion of mortgage-backed securities. In addition, the FOMC will include purchases of agency commercial mortgage-backed securities in its agency mortgage-backed security purchases. Supporting the flow of credit to employers, consumers, and businesses by establishing new programs that, taken together, will...

The Federal Reserve said Monday it will launch a barrage of programs aimed at helping markets function more efficiently amid the coronavirus crisis. Among the initiatives is a commitment to continue its asset purchasing program “in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy.” That represents a potentially new chapter in the Fed’s “money printing” as it commits to keep expanding its balance sheet as necessary, rather than a commitment to a set amount.

The Federal Reserve Bank of New York added $70.2 billion in temporary liquidity to financial markets. Tuesday’s intervention came in two parts. One was via overnight repurchase agreements, or repos, that totaled $41.7 billion. The other came in a $28.5 billion 13-day repo. The Fed took all securities offered in both operations. Central-bank repo interventions take in Treasury and mortgage securities from eligible banks in what is effectively a short-term loan of central-bank cash, collateralized by the securities. The Fed’s money-market operations are aimed at ensuring that the financial system has enough liquidity and that short-term borrowing rates are stable...

he Federal Reserve on Tuesday injected longer-term cash into the U.S. banking system in an effort to meet the funding needs of banks and Wall Street following a bout of turbulence in money markets last week. The New York Federal Reserve added $30.0 billion cash into the banking system through 14-day loans to primary dealers. These 14-day term repurchase agreements (repo) were on top of the $75 billion in temporary cash through an overnight repo operation. Primary dealers, or the top 24 Wall Street firms that do business directly with Fed, borrow from the central bank by using their Treasuries...

<p>New York (AFP) - The New York Federal Reserve Bank said Friday it will continue to inject billions into the US financial plumbing on a daily basis through November 4, extending the operations by three weeks.</p> <p>The effort, begun in mid-September, is aimed at preventing a spike in short-term interest rates, the New York Fed said in a statement.</p>

President Donald Trump on Wednesday harshly rebuked the Federal Reserve, accusing the central bank and Fed Chair Jerome Powell of having “no guts” by not meting out a more aggressive interest rate cut as the global economy slows. The Federal Reserve on Wednesday cut interest rates again by 25 basis points to a new target range of 1.75% to 2%, and telegraphed a strong likelihood of one more rate cut by the end of the year. However, some on Wall Street anticipated a more aggressive easing of 50 basis points, particularly with financial markets conditions tightening. Indeed, markets sank to...

The central bank announces it’s taking down its benchmark overnight lending rate to a target range of 1.75% to 2%. According to the Fed’s “dot plot” of individual expectations, five members thought the FOMC should have held its previous range of 2% to 2.25%, five approved of the 25 basis point cut but keeping rates there through the rest of the year, and seven favored at least one more cut this year. The Federal Reserve approved a much-anticipated quarter-point interest rate cut Wednesday but offered few indications that further reductions are ahead as members split on what to do next......

FULL TITLE: Enraged female motorist 'bites' tow truck driver and smashes windows as her prized SUV is taken away for repossession A female motorist has been accused of savagely biting a recovery man after he arrived at her home to tow away her vehicle for repossession. Lakeisha Smith, 29, from Spartanburg, South Carolina, flew into a rage on Sunday evening when Scott Fowler came to pick up her prized Cadillac Escalade, with part of the event caught on camera. Cell phone-filmed footage shows her trying to drive the luxury SUV off the tow truck before manically smashing in all of...

With quips like " I'll slap you so hard you'll starve to death before you stop slidin'", it's sometimes hard to remember that they are putting life and limb at risk doing repo work.

Octomum Nadya Suleman held a yard sale on Saturday in a desperate attempt to raise enough money to keep a roof over the heads of her 14 children. The sale drew a crowd of more than 150 people and police were forced to shut off her street in La Habra, California, because more kept arriving. Miss Suleman, 35, is reportedly more than a month behind on her mortgage payments and says she is facing foreclosure. But she insist she has turned down lucrative offers to strip off for Playboy or to appear in an adult movie .

Presenting a detailed look at "Repo 105" - the next soundbite sure to fill the airwaves over the next weeks and months, as more and more banks are uncovered to be using this borderline criminal accounting gimmick to make their leverage ratios look better. This is the first time we have heard this loophole abuse by a bank, be it defunct (Lehman) or existing (everyone else). There should be an immediate investigation into how many other banks are currently taking advantage of this artificial scheme to manipulate and misrepresent their cap ratio, and just why the New York Fed can...

A new report issued today by the National Bureau of Economic Research indicates that the present severe recession is much more than simply a subprime mortgage crisis. No doubt the government's policy of applying pressure to mortgage lenders via FannieMae and FreddieMac to lend money to those unable to afford mortgages was a major contributor to the financial meltdown. However, the NBER report indicates that the problem is much deeper. In order to understand the problem one must become familiar with a little-known entity by the name of REPO--the Renew Sale and Repurchase market for collateralized securities:

One of my favorite reality shows turns out to be completely fake. Operation Repo is show on TruTV (formerly CourTV) where a team of reposession agents go around repossessing vehicles for finance companies. Everytime I watch the show, one of the guys (Matt) is always roughing someone and I always wonder how they get away with it.. i know now, it's all FAKE! If the show was real, Matt would violate the Collateral Recovery Act of the State of California as repossesion agents are not allowed to rough people up. Not sure I can watch the show anymore now that...

Jennifer Stone-Anderson says her 2004 Saturn Ion became a work of art this fall when she covered it with elaborate paintings supporting Barack Obama. But Chrysler, which financed her car purchase, maintains that it's just a car. And that Stone-Anderson has been missing payments. And that her work of "art" is about to be repossessed. Read on