The Sad State of the Repo Market - AK5.1

10/23/19 • 35 min

The repo market has been in the news lately with the Fed intervening for the first time since the 2008 financial crisis to shore up liquidity problems. We explain how the repo market works, go over the timeline of events in the market thus far, and discuss its wider implications.

Topics include:

What a repo is and why it’s important

The role of the Fed

Timeline of events

Future projections

Links: https://www.investopedia.com/terms/r/repurchaseagreement.asp

https://realinvestmentadvice.com/who-could-have-known-what-the-repo-fiasco-entails/

https://www.newyorkfed.org/markets/opolicy/operating_policy_190920

Topics include:

What a repo is and why it’s important

The role of the Fed

Timeline of events

Future projections

Links: https://www.investopedia.com/terms/r/repurchaseagreement.asp

https://realinvestmentadvice.com/who-could-have-known-what-the-repo-fiasco-entails/

https://www.newyorkfed.org/markets/opolicy/operating_policy_190920

Previous Episode

Understanding Stock Buybacks - AK4

Since the 2008 financial crisis stock buybacks have been at historically elevated levels. These levels have accelerated at an even greater pace since the Trump Tax cuts. In this episode we explain what stock buybacks are and the consequences of this poorly understood corporate policy.

Topics include:

What stock buybacks are and how they work

A short history on stock buybacks

Decrease in stock ownership by households and individuals

Majority of stocks owned by wealthiest Americans

Executive compensation packages

Margin and corporate debt to GDP at all time highs

Unintended consequences of stock buyback policy

Links:

https://realinvestmentadvice.com/wp-content/uploads/2019/04/Stock-Buybacks-2019.png

https://www.investopedia.com/articles/02/041702.asp

https://finance.yahoo.com/news/7-reasons-stock-buybacks-illegal-172253787.html