Six Links that Prove the Fed May Not Be in Control of the Repo Markets

Here are four links that you should bookmark, showing the Fed board of directors not being in control of the outworking of the derivatives repo market. They may have an ace up their sleeves, but you have to wonder what it would be. Read these articles in order and you will get a sense of what people in the know worry about at night regarding the markets:


http://www.businessweek.com/articles/2012-09-20/a-shortage-of-bonds-to-back-derivatives-bets 

http://www.examplesofglobalization.com/p/gold-and-low-interest-rates.html

http://www.bloomberg.com/news/2014-07-06/bond-anxiety-grows-in-1-6-trillion-repo-market-as-failures-soar.html

http://www.zerohedge.com/news/2014-07-10/current-repo-fails-issue-rebukes-any-notion-fed-control


http://www.dailykos.com/story/2011/11/02/1032356/-Why-the-FDIC-is-Upset-With-Bank-of-America-s-Derivatives-Transfer-Despite-Dodd-Frank#

http://www.examplesofglobalization.com/2013/03/are-damn-bankers-running-out-of.html

The outcome could be dreadful for the stock market. So average guys may not be understanding that leverage makes markets and when you take the leverage cool aid away, by the inability to secure sound collateral for trades, you can have serious crashes.

I hope the stock market crash that could be coming does not take down the US economy with it.

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