Thanks Revi for a great link to that Forbes article. It's refreshing to see someone discuss the issue in plain English and without using obvious hyperbole.
I had no idea the numbers were so huge in terms of the collateral risk, vs. what's on the books.
And given that the problem still exists IN SPADES over a decade after the peak of the financial crisis, with apparently NOTHING of substance done about it is outrageous, IMO.
To be clear on where we are, the rate spike was 9/17, and although the Repo rates have crept back above 2%, they're nowhere near the spike levels -- at least not yet. But I don't like how the amounts the Fed is using to keep the market in check are growing, so something is still apparently brewing. The conclusion from the article that some big bank (or similarly key financial institution) is in trouble seems logical.
Looking around, I think some Fed web pages are good places to look at the actual numbers, without the hyperbole, opinions, commentary, politics, etc. that might come with articles on the subject.
1). The SOFR, or Secured Overnight Funding Rate, shows what the rates are, and in what proportion. And the chart at the bottom makes the trend visually intuitive, shows the top rate (not just at the 99th percentile), and also shows the overall volume for the borrowing (not just the Fed overnight Repo operations, which are small compared to the overall overnight borrowing).
This confirms that the rate spike (thus far) was mainly for 9/16 - 9/18.
https://apps.newyorkfed.org/markets/autorates/SOFR2). The magnitude of the Fed overnight repo operations is shown with the following link. The total numbers of treasuries seem to correspond pretty well with the daily news on the repo operations.
The objection I have to this data (which is why I found the SOFR data above) is the "high" rate indicated by the SOFR (see 9/17, for example), which doesn't seem to reflect what's going on with the rates, at least accurately -- showing the top treasury rate paid at only 3.25.
If someone with facts or other links can explain why this is and why the big difference, that would be helpful and appreciated, for us wanting to keep an eye on events like this.
https://apps.newyorkfed.org/markets/aut ... 01/01/20003). I got the link above, showing the detail of the last 25 Fed Repo operations by clicking on the link near the bottom of the main Fed Repo and Reverse Repo page, here:
https://apps.newyorkfed.org/markets/autorates/tempYou can get longer term data on such Fed operations via the links at the bottom of the web pages for links 2 and 3.