The Repo Market is melting down again, and this is the third time. The first time led to the last financial crisis, and the second occurred in September 2019 when the banking system almost seized up again.
We walk through how the massive shorting, at an almost all-time record, of 10 year treasuries is leading to a seizing up of the repo market again. Fed Chairman Powell chose to ignore the issue at his appearance at the WSJ event, but the market will surely want to know his response sooner rather than later.
I walk you through the history of the repo market crisis, and why this time is a bit different and carries more risk with it than the September 2019 repo event.
The market is losing confidence in the most liquid and robust Treasury market and I believe this means we are very close to a crisis event in bonds. This could be foreshadowing the coming black swan event that takes out the world banking system.
I also show you some distributing footage of my trip to the Virginia state capitol and what is going on there. It is highly unusual and could be telling us that officials are worried about much more turbulence coming our way in the economy, and how people may react to it this time in this highly charged environment.
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