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uhsguy · 1691 days ago · link · · parent · post: The Fed just pumped $128 billion into markets to pull down interest rates, its first injection in 10 years
This is really wacky stuff, As far as I understand the only reason this would happen is if there is no cash on hand at the banks or if the securities offered for repo were bad. I find it hard to believe that there was no cash available to lend so the likely scenario is that someone showed up on the repo market with some really toxic securities. Just like bear sterns some large firm is about to go boom. The one thing against that is that once somebody shows up with the toxic assets everybody else knows that implosion is imminent so panicked selling should follow, but that didn’t happen in June 2007 so maybe the market isn’t that in tune or the smart money knows how to not spook the big payday.