possible financial market alert: New York Fed spends $53 billion to rescue the overnight lending market

That article seemed like a paid advertisement for The sheeple to continue spending and ignore the gaping cracks in the foundation.

Funny but I think we’ve been here before. Not sure how to prepare financially, what if the dollar collapses? That’s my biggest concern. Real estate goes up and down so no worries if you can wait it out, same with stocks, but what about the dollar? What will your savings look like in a collapse?

Not to mention, what will our streets look like?

The next recession is due for a depression.

Sept. 30, 2019 8:27 am ET
The Federal Reserve Bank of New York added $63.5 billion to the financial system Monday, using the market for repurchase agreements, or repo, to relieve funding pressure in money markets.

Banks asked for $63.5 billion in overnight reserves, all of which the Fed accepted, offering collateral in the form of U.S. Treasury and mortgage securities.

In the repo market, borrowers seeking cash offer lenders collateral in the form of safe securities—frequently Treasury bonds—in exchange for a short-term loan. The term of these loans can be as short as overnight.

When the Fed adds money to the financial system through the repo market, it is acting as a lender. In typical repo market transactions, lenders can include money-market mutual funds, banks or hedge funds that are seeking to earn a slightly higher rate of interest than what is available from holding very short-term government securities. The borrowers are often banks, securities firms or hedge funds that use the cash to finance positions in the market.

[link to www.wsj.com (secure)]

Article:

Q. Can we talk about the recent flareup in the repo market? What happened? I have a colleague who says when something like that happens, the market is trying to tell us something.

A. Yes. (Laughs.) The irony of this is, I have met with large bank CEOs that are in the market and are sitting on, frankly, a trillion plus dollars of cash. I’m wondering why exactly, why didn’t they go into the marketplace, recognizing there was a shortfall and they could have made money. So we are meeting now with their treasurers and chief risk officers to understand exactly the reasons why. If it’s regulations, we need to make sure we understand.

If they are holding on to money —cash — and U.S. Treasurys because our rules require them to, and that’s causing liquidity not to be in the marketplace, we should fix that. Because you want a liquid marketplace and it’s supposed to work seamlessly, right? We’re not sure actually that’s the largest component of what happened but once we’re done talking to all the large banks we’ll have a better sense.

We’re also taking a look at whether there was a market inefficiency that we just could not have foreseen or have not been able to address. So we talked to the New York Fed and we talked to the Federal Reserve Board. I don’t have a great answer for you just yet. If it’s the regulations we need to address it, or is it a combination of regulations and banks just being uncomfortable unloading cash this late in the recovery cycle.

[link to www.marketwatch.com (secure)]