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37 lines
3.3 KiB
Markdown
37 lines
3.3 KiB
Markdown
Reverse Repo Overnight Lending Chart - May 28 2021 update
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| Author | Source |
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| :-------------: |:-------------:|
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| [u/HODLTheLineMyFriend](https://www.reddit.com/user/HODLTheLineMyFriend/) | [Reddit](https://www.reddit.com/r/DDintoGME/comments/nn2yfa/reverse_repo_overnight_lending_chart_may_28_2021/) |
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---
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[𝗦𝗽𝗲𝗰𝘂𝗹𝗮𝘁𝗶𝗼𝗻](https://www.reddit.com/r/DDintoGME/search?q=flair_name%3A%22%F0%9D%97%A6%F0%9D%97%BD%F0%9D%97%B2%F0%9D%97%B0%F0%9D%98%82%F0%9D%97%B9%F0%9D%97%AE%F0%9D%98%81%F0%9D%97%B6%F0%9D%97%BC%F0%9D%97%BB%22&restrict_sr=1)
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Latest from the NY Fed Desk, $479.5B in reverse repo treasury lending with 50 counterparties ([link](https://apps.newyorkfed.org/markets/autorates/temp)). Down by only 1%, counterparties unchanged. R2 value still at 0.95 on the curve. See below for what this means and how it *might* relate to GME.
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I think, given recent DD (including [today's](https://www.reddit.com/r/Superstonk/comments/nmxmri/clearing_up_the_fed_reverse_repos_and_what_it/) from [u/c-digs](https://www.reddit.com/u/c-digs/)), that this is either a) banks getting handed too much cash and trying to get it off their books overnight by turning from a liability (customer cash) to an asset (Treasury), or b) banks lending these Treasuries to hedge funds to improve their collateral and avoid margin calls. Or maybe a combination of both.
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[](https://preview.redd.it/4v9sr4gmaw171.png?width=876&format=png&auto=webp&s=d32e1c1d75c0d3285320b36eaadf7ae3b2063f80)
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Linear match improved, with R2 of 0.927:
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[](https://preview.redd.it/axwx1sj1bw171.png?width=877&format=png&auto=webp&s=edfca046fe0c418826727e8009f7fdd00f0483f0)
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Quick reminder: there is no $500B cap on Reverse Repo treasury lending. There is, however, an $80B limit per participant, so individual banks may start 'running out' of Treasuries to lend onward to their hedgie friends, if that is what they are doing.
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Useful links
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- Yesterday's chart: <https://www.reddit.com/r/DDintoGME/comments/nmcn1e/reverse_repo_overnight_lending_chart_update_for/>
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- DD into Repo/Reverse Repo for those who are curious: <https://www.reddit.com/r/DDintoGME/comments/nlbsgy/the_fed_repo_market_and_overleveraged_equities/>
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- Some DD on the true limit of the reverse repo by [u/BlindasBalls](https://www.reddit.com/u/BlindasBalls/): <https://www.reddit.com/r/DDintoGME/comments/nkmoi9/response_to_the_post_about_the_reverse_repo_limit/>
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- Helpful/hilarious explainer on the Reverse Repo situation: <https://www.reddit.com/r/Superstonk/comments/nixxvc/fed_is_in_a_pickle_economy_is_fuk_edition/?utm_source=share&utm_medium=ios_app&utm_name=iossmf>
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- Where's the cash coming from? DD on possibility of many people getting out of equities: <https://www.reddit.com/r/Superstonk/comments/nmxmri/clearing_up_the_fed_reverse_repos_and_what_it/>
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Keep on HODLin', friends! 🚀🚀🚀
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