tyb
Fed's Third "Year-End" Repo Oversubscribed Again Amid Liquidity Scramble As Dec 16 Tax Day Looms
tick, tock
One week after the Fed's second 42-day term repo which allowed dealers to lock in funding into the new year and which was again oversubscribed, confirming a growing scramble for year-end funding, traders were looking ahead to the result from today's third "year-end" repo, this time with a 28-day term maturing on January 6. And, as we noted last week, year-end liquidity fears remain front and center as the $25 billion - which the Fed expanded from $15 billion late last week - proved to again be roughly 40% below the required size to satisfy all liquidity demands.
Dealers submitted $43 BN in bids for the 28-day op ($29.80 BN in Treasurys, $0.1BN in Agency, $13.1BN in MBS paper), resulting in an oversubscription of the $25BN in available repo, and confirming that the Fed may have to add additional "year-end" repos to satisfy all dealer liquidity demand as we enter 2020. This was modestly above the $42.550 billion submitted last week in the second 42-day repo operation conducted on December 2: cap #2
At the same time, the Fed also announced that in the latest overnight repo, it had accepted $56.4 billion in securities, a modest drop from the recent range and the lowest roll amount since the Fed expanded the available size of overnight repos to $100 billion. A big reason for this is likely that $25 billion was shifted over from overnight to 28-day term repos.
At the same time, the Fed also announced that in the latest overnight repo, it had accepted $56.4 billion in securities, a modest drop from the recent range and the lowest roll amount since the Fed expanded the available size of overnight repos to $100 billion. A big reason for this is likely that $25 billion was shifted over from overnight to 28-day term repos.he biggest concern: the repo rate over year end remains stubbornly stuck well above 3%, more than double the Fed Fund rate, and clear evidence that the US interbank plumbing remains broken.
It remains a pressing question for funding markets why, even with QE4 in place and now daily overnight and short-term repo operations in place, banks continue to rush to lock in year-end liquidity, where some fear a similar explosion in overnight repo rates as was observed on Dec 31, 2018 when General Collateral soared amid a widespread liquidity shortage. Indeed, even with the Fed’s commitment to continue providing liquidity to the financial system around year-end, the market is still showing concerns, indicating that for all its telegraphed firepower, the Fed has failed to calm markets and ease counterparty risks which as the BIS observed yesterday, now involve hedge funds.As a reminder, since the Sept 16 repo blow up, the Fed has injected $208 billion via "temporary" rolling overnight and term repos, and $114 billion via permanent T-Bill purchases.
What is even more troubling is that in just 6 days, the next major potential crack in the repo market is due: on Dec. 16 there is a tax payment day looming; that's when cash is drained from the banking system, similar to the Sept 16 tax payment which many alleged sparked the original repo crisis, and as Bloomberg's Marcus Ashworth notes, "with the repo rate over the year end more than double the Fed rate of 1.5%-1.75%, this is not proving to be a temporary problem."
https://www.zerohedge.com/markets/feds-third-year-end-repo-oversubscribed-again-amid-liquiduity-scramble-dec-16-tax-day-looms
bigger and bigger heading into the year-end print…they are screwed and this cannot be fixed but they will get a fresh set of books to play games with starting in 2020.
it is only a matter of time.
kek
The Depository Trust Company
DTCC finds 1.3 million soaked securities in Sandy-flooded NY vault
The Depository Trust & Clearing Corp., which processes financial transactions and stores securities, has begun the long process of recovering about 1.3 million soaked securities that were stored in a 10,000-square-foot underground vault in a lower Manhattan skyscraper flooded by Superstorm Sandy.
The company declined to disclose the value of the stocks and bonds. But it was a “very small percentage” of the $39.5 trillion of stocks and bonds that its depository stores, DTCC spokeswoman Judy Inosanto said. The percentage of securities that are handled electronically are in the “high 90s”, she said.
Inosanto declined to say when the company was able to open the vault at 55 Water Street, which was flooded more than two weeks ago by surges churned by Superstorm Sandy. But when it did, DTCC found significant flooding and water damage.
“While it is premature to determine the full extent of the damage, it is essential to begin the restoration process to avoid further deterioration,” the company said in a statement.
DTCC said the recovery effort is more of “an administrative and logistical challenge than an economic issue.”
It maintains a vast certificate inventory file with ownership information, which can be replicated from its data centers. The company said its computer records are intact, and includes detailed inventory files of the vault’s contents.
DTCC has retained disaster recovery and expert restoration firms, but declined to identify them. It said it could not yet determine how many of the physical certificates can be restored. But it expects to have a more accurate assessment of their condition in about a week. The restoration process could take months, it said.
The company said it is in discussions with various transfer agents to establish a procedure to issue replacement certificates, without requiring the original certificates to be present.
https://www.reuters.com/article/us-storm-sandy-securities-idUSBRE8AE02G20121115
and then left the door open to "dry" them out and set it on FIRE.
DTCC to Relocate its Storm-Damaged Vault
The Depository Trust and Clearing Corporation plans to re-locate the vault that held $35 trillion worth of paper securities at its headquarters in lower Manhattan, when the storm surge from Hurricane Sandy hit at the end of October.
The headquarters vault will be moved to another location, according to Judith Inosanto, vice president of communications for the securities industry’s clearing and settlement utility.
Where the new vault will be located won’t be disclosed, to protect the security of the securities it holds from physical threats. The existing vault, 40 years old, suffered significant water damage, Inosanto said.
The strong room stored roughly 1.3 million physical securities. DTCC is currently in an extensive restoration effort, trying to salvage the certificates.
But, in the great majority of cases, the value and ownership of the certificates won’t be lost, if the document itself can’t be restored. DTCC officials said that the vast majority of certificates, probably more than 95 percent, are backed up in electronic form, elsewhere. Meanwhile, DTCC officials are mopping up the physical damage.
“We are currently in the restoration process to avoid further deterioration. It is too early to determine how many of the physical certificates can be restored and the restoration process will take some time, possibly months,” according to Inosanto.
Still, DTCC officials said electronic records of all the certificates are secure. “DTCC,” the utility said in a press release, “maintains a robust certificate inventory file with ownership information that can be replicated from our multiple data centers.”
DTCC said that the certificate recovery process is “more of an administrative and logistical challenge than an economic issue.”
The building in which DTCC is housed has been ill-starred in the past month. Besides being inundated by Sandy, fire broke out in the basement last Friday while workers were trying to effect repairs.
Twenty-seven of the workers were treated for smoke inhalation. All were working on repairs.
DTCC’s workers and executives have not yet returned to 55 Water Street. There was no impact on DTCC or its employees as a result of the fire. But a power inspection as well as a full health and safety inspection will need to be completed before DTCC can look to return.
“Our headquarters remain inaccessible,” says Inosanto. “The building cannot provide an exact date at this time on a return to our offices,” she said.
The headquarters of ratings agency Standard & Poor’s also are located in 55 Water Street. None of its records were affected by the fire and that none of its personnel was in the building at the time.
S&P operations are going on in various parts of the New York, New Jersey and Connecticut region. The firm has “been up and operational since about a week after the storm,” spokesman Ed Sweeney said.
Some workers at housed at parent company McGraw-Hill Companies facilities in midtown. When any employees will move back to Water Street has not been determined.
Also remaining displaced is the Security Traders Association, which represents 4,200 individuals involved in trading equities and equity options.
Operations usually housed at the STA headquarters at 80 Broad Street remain relocated at a temporary headquarters site at Penn Plaza in midtown Manhattan.
“We hope to be able to return to Broad Street in January,” said James Toes, president and chief executive officer of STA.
https://www.tradersmagazine.com/clearing/dtcc-to-relocate-its-storm-damaged-vault/
they were in the process of tokenizing all this shit too. Then Blythe was shown the door.
CEO Of Digital Assets, Blythe Masters Departs Company
https://coinpedia.org/news/blythe-masters-departs-company/
got them all. will push when I go in there.
Bankrupt PG&E to take $4.9 billion more charge on wildfire victim claims
PG&E Corp said on Monday it would take a pretax charge of $4.9 billion in the current quarter related to the settlement of claims from victims of some of most devastating wildfires in California's modern history.
The bankrupt power producer said on Friday it had reached a $13.5 billion settlement with victims of 2017 and 2018 wildfires.
The company had already taken a $2.5 billion charge in the last quarter for estimated third-party claims related to 2017 wildfires and 2018 Camp fire.
The agreement with the victims announced on Friday was one of the last hurdles for the company to emerge from bankruptcy. It filed for Chapter 11 protection in January, citing potential liabilities in excess of $30 billion from wildfires in 2017 and 2018 linked to its equipment.
PG&E had previously settled for $1 billion with cities, counties and other public entities as well as for $11 billion with insurance carriers related to the wildfires.
https://www.reuters.com/article/us-california-wildfire-pg-e-us/bankrupt-pge-to-take-4-9-billion-more-charge-on-wildfire-victim-claims-idUSKBN1YD1IB
http://investor.pgecorp.com/financials/sec-filings/sec-filings-details/default.aspx?FilingId=13785445
chek'd quads
>while this sits on her desk.