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Member since: Tue May 13, 2014, 05:50 PM
Number of posts: 5,893

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Repo Crisis Fades

Repo Crisis Fades Away With Second "Undersubscribed" Turn Repo Even As Pozsar Doubles Down On Doomsday

It looks like the year-end repocalypse that was predicted by Credit Suisse strategist Zoltan Pozsar is not going to happen this year after all.

This means that today's repo is either good news, or bad news: good news if banks don't need any additional liquidity for year end, but bad news if they are simply prevented from seeking more Fed reserves due to balance sheet limitations (and how many securities they can pledge), even as the overall funding in the repo market remains insufficient.

As usual, keep a track on the overnight repo rate for confirmation if things are getting better or worse. Incidentally, today the rate dropped 2bps to 1.545%...

Emirates Plants Secret Spy Tools In Popular App

WASHINGTON — It is billed as an easy and secure way to chat by video or text message with friends and family, even in a country that has restricted popular messaging services like WhatsApp and Skype.

But the service, ToTok, is actually a spying tool, according to American officials familiar with a classified intelligence assessment and a New York Times investigation into the app and its developers. It is used by the government of the United Arab Emirates to try to track every conversation, movement, relationship, appointment, sound and image of those who install it on their phones.

A technical analysis and interviews with computer security experts showed that the firm behind ToTok, Breej Holding, is most likely a front company affiliated with DarkMatter, an Abu Dhabi-based cyberintelligence and hacking firm where Emirati intelligence officials, former National Security Agency employees and former Israeli military intelligence operatives work. DarkMatter is under F.B.I. investigation, according to former employees and law enforcement officials, for possible cybercrimes. The American intelligence assessment and the technical analysis also linked ToTok to Pax AI, an Abu Dhabi-based data mining firm that appears to be tied to DarkMatter.

DOW 28455 for Friday 12-20-19

Previous close 28376. 52 wk high 28608. 52 wk low 21712. Today's low 28445. High 28608.

DOW closed at 28135 last Friday 12-13-19

NASDAQ : 8924 ▲

S&P : 3221 ▲

Oil WTI : 60.32 ▼

Soybeans : 9.28 ▲

New highs for the year!! Stay safe and enjoy the weekend everybody.

DOW 28376

Previous close 28239. 52 wk high 28381. 52 wk ow 21712. Today's low 28278. High 28381.

NASDAQ : 8887 ▲

S&P : 3205 ▲

Oil WTI : 61.30 ▲

Soybeans : 9.25 ▼

Repo Crisis Fades Away: For The First Time, A "Turn" Repo Is Not Oversubscribed

It looks like the year-end repocalypse that was predicted by Credit Suisse strategist Zoltan Pozsar is taking a raincheck.

Today's Term Repo saw $26.25BN in security submissions ($15.75BN in TSYs, $10.5BN in MBS), below the $35BN in total availability. This was the first "turn" repo that was not fully subscribed (on Monday, there was $54.25BN in demand for $50BN in repos maturing on Jan 17).

As such, it now appears that banks finally have their fill of what they believe will be sufficient year-end liquidity, and all subsequent "turn" repos will likely see a lower allotment as the Fed's $500BN liquidity backstop bazooka ends up being underutilized.

In his latest comment on the repo market, Curvature's Scott Skyrm noted that "once the term RP operations switch to being undersubscribed, it either means most of the Street's year-end funding need is fulfilled, or banks are close to their balance sheet limits."

DOW 28239

Previous close 28264. 52 wk high 28337. 52 wk low 21712. Today's low 28239. High 28323.

NASDAQ : 8827 ▲

S&P : 3191 ▼

Oil WTI : 60.97 ▲

Soybeans : 9.27 ▼

Massive spending, tax packages headed for Senate

The House approved $1.4 trillion in spending for the fiscal year that began almost three months ago, in an almost surreal business-as-usual fashion that seemingly ignored the historic articles of impeachment scheduled for the floor the very next day.

Lawmakers made a show of dividing the spending measures into two bundles, in order to avoid the oft-ridiculed omnibus bill that both sides say represents the worst of the “swamp.” But the rushed nature of the vote, and in particular the late-night deal that tacked on a nearly $54 billion tax package, runs counter to promises of a more transparent process where the rank-and-file has input and time to study the legislation.

“I’m not going to do it again. Nobody read it. It’s only hours old. Some people don’t even know what is in” it, President Donald Trump said in March 2018 when he signed a $1.3 trillion fiscal 2018 omnibus bill.

The Senate is expected to vote on the spending packages this week and key White House aides have indicated Trump plans to sign the bills before a temporary spending bill expires at midnight Friday.

Appropriators hit Air Force's 'disturbing' diversion of funds

Service officials moved $1.3 billion from pilot training accounts without telling Congress

“The review of the fiscal year 2020 budget request uncovered some disturbing data points that have called the budget formulation process for flying hours in the overseas contingency operations (OCO) request into question,” appropriators said in the report accompanying the compromise fiscal 2020 Defense spending measure released Monday night.

The Air Force moved just under $1.3 billion in fiscal 2018 and 2019 to “unbudgeted expenses,” according to the report. Appropriators did not elaborate on where the Air Force moved the money.

DOW 28264

Previous close 28235. 52 wk high 28328. 52 wk low 21712. Today's low 28220. High 28328.

NASDAQ : 8823 ▲

S&P : 3192 ▲

Oil WTI : 60.91 ▲

Soybeans : 9.28 ▲

New highs.

DOW 28235

Previous close 28135. 52 wk high 28337. 52 wk low 21712. Today's low 28191. High 28337.

NASDAQ : 8814 ▲

S&P : 3191 ▲

Oil WTI : 60.25 ▲

Soybeans : 9.21 ▲

New high for the NASDAQ and the DOW.
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