dChan
Anonymous ID: 5fc549 Jan. 9, 2020, 6:27 a.m. No.7761417   🗄️.is đź”—kun   >>1496

these have been under-subbed (for the amounts offered) for a few weeks now. Picking up again….

 

Fed Injects $83BN In Liquidity As Market's Repo Addiction Getting Worse

 

 

Two days after we reported that a disturbance may be brewing below the surface of the repo market again, after the first oversubscribed term repo in over three weeks, when on Jan 7 the Fed received $41.1BN in submissions for its $35BN two week repo, we got another indication just how strong the market's addition to the Fed's easy repo money has become, when moments ago the Fed announced that its latest 2-week term repo operation was also almost oversubscribed, as $34.3BN in securities ($23.3BN in TSYs, $11BN in MBS) were submitted for today's $35 billion operation, as dealers continue to scramble to the Fed for liquidity which they are no longer using for merely "regulatory" year-end purposes (since it is no longer year-end obviously), but are instead using it to pump markets directly. Today's operation, which was just shy of the maximum $35BN allowed, was the second highest term repo since Dec 16, and suggests that as repos are now maturing at a rapid burst (as we noted last week in "Mark Your Calendar: Next Week The Fed's Liquidity Drain Begins"), dealers remain as desperate as ever to roll this liquidity into newer term operations. And just in case there was any doubt that the liquidity shortage isn't getting better, moments later the Fed announced that in its daily Overnight repo operation, it also accepted $48.825BN in securities ($24.2BN TSYs, $24.625BN in MBS), for a total liquidity injection of just over $83 billion! The latest repo operations also confirmed what we discussed overnight in "Top Repo Expert Warns Fed Is Now Trapped: "It Will Take Pain To Wean The Repo Market Off Easy Cash"" in which we noted that according to Curvature Securities' repo expert Scott Skyrm, something appears amiss as the total overnight and term Fed RP operations on Friday were greater than on year end! On year-end, the Fed had pumped a total of $255.95 billion into the market verses $258.9 billion on Friday.

 

The problem, as Skyrm explained, is that the market had gotten addicted to the easy Fed liquidity unleashed in September (via temporary repo ops), and then again in October (via permanent T-Bill purchases): "it's easy to see how the Repo market can get addicted to easy cash from the Fed when the stop-out rates for the RP operations are 1.55% - behind the offered side of the market." But, as the repo strategist added, as the Fed keeps injecting cash, the market gets used to it.

 

Which is great in the short-term as it sends risk assets soaring, but become a major issue over the long-term: "The long-term problem is that the some investor cash (real money cash) that was once going into the Repo market is now going elsewhere", Skyrm explains.

 

Indeed, the problem is that repo rates are trading in the lower end of the fed funds target range. When GC rates were higher in the range, Repo general collateral, as an investment, was more competitive than other overnight rates. But now that cash has gone to other markets. In short, just as the market got addicted to QE and the result was a 20% drop in the S&P in late 2018 when markets freaked out about Quantitative Tightening, the Fed's shrinking balance sheet, and declining liquidity, Skyrm cautions that "it will take pain to wean the Repo market off of cheap Fed cash" since "it's a circle" which can be described as follows:

 

For the Fed to end daily RP ops, they need outside cash to come back into the Repo market. For the Repo market to attract cash, Repo rates need to move higher. For rates to move higher, the Fed needs to stop RP ops.

fucked

 

The problem is that stopping RP ops could spark another repo market crisis, especially with $259BN in liquidity pumped currently - more than at year end - via Repo. It also means that the Fed is now unilaterally blowing a market bubble with its repo and "NOT QE" injections, and yet the longer it does so the more impossible it becomes for the Fed to extricate itself from the liquidity pathway without causing a crash.

 

Or stated simply, the longer the Fed avoids pulling the repo liquidity band-aid, the bigger the market fall when (if) it finally does. The question then becomes whether Powell can keep pushing on the repo string until the November election, because a market crash in the months preceding it, especially since it will be of the Fed's own doing, will result in a very angry president.

https://www.zerohedge.com/markets/markets-repo-addiction-getting-worse-latest-term-repo-operation

Anonymous ID: 5fc549 Jan. 9, 2020, 6:50 a.m. No.7761545   🗄️.is đź”—kun   >>1552

Greece’s Alpha Bank Launches Process to Slash Its Bad Loan Pile

 

Restructuring hinges on sale of 12 billion euros in bad loans. State guarantees could help lender, peers, cut NPE levels.

 

Greece’s Alpha Bank AE has taken the first steps in a plan to drastically cut its bad-loan pile after the government made it easier to sell soured debt as securities.

 

The lender has sent potential investors documentation detailing its plans, according to two people familiar with the matter, who asked not to be named discussing confidential proceedings. Alpha Bank seeks to sell 12 billion euros ($13.3 billion) of soured debt and offload its servicing unit.

 

Alpha Bank wants to wrap up its current securitization project, dubbed Galaxy, by the end of September. Over the longer run, it’s targeting a reduction of non-performing exposures to less than 10% of total loans by the end of 2022, compared with around 44% in September. The Greek government in December initiated a plan known as Hercules to help banks repackage bad loans into sellable securities with the state providing backing for the least risky portions. Greece will provide as much as 12 billion euros in guarantees, which is expected to help lenders to cut NPEs by some 33 billion euros.Alpha Bank plans to apply for as much as 3.7 billion euros of guarantees under Hercules, and has announced plans to sell as much as 900 million euros of Tier 2 notes by 2022 to boost its capital.

 

A spokesman for Alpha Bank declined to comment.

 

Bad loans held by the country’s banks peaked in 2016 at over 100 billion euros and have since fallen to around 74 billion euros. They’ve pledged to the European Central Bank’s Single Supervisory Mechanism to cut that figure to some 20 billion euros by 2021.

Anonymous ID: 5fc549 Jan. 9, 2020, 7:04 a.m. No.7761625   🗄️.is đź”—kun

'''Nike Pres Consumer and Marketplace sold $9.22m- Jan 7==

 

Muh option exercise and sale.

Input cost: $3,488,400 sale at market price.

https://www.finviz.com/insidertrading.ashx?oc=1371578&tc=7&b=2