Worldwide Research. Could be the run using the Dollar Due to Panic or Greed?

Worldwide Research. Could be the run using the Dollar Due to Panic or Greed?

What’s happening in the repo market? Rates on repurchase agreements (“repo”) must certanly be around 2%, based on the fed funds price. Nevertheless they shot as much as over 5% on September 16 and got because high as 10% on September 17. Yet banking institutions had been refusing to provide to one another, evidently moving up profits that are big keep their cash – in the same way they did when you look at the housing industry crash and Great Recession of 2008-09.

Since banks weren’t lending, the Federal Reserve Bank of brand new York jumped in, increasing its overnight repo operations to $75 billion; as well as on October 23 it upped the ante to $120 billion in instantly operations and $45 billion in longer-term operations.

Exactly why are banks not any longer lending to one another? Will they be afraid that collapse is imminent someplace within the system, just like the Lehman collapse in 2008?

Possibly, and if therefore the most likely suspect is Deutsche Bank. More →