Dysfunctional Treasury and Repo Markets Putting Financial System at Risk.

in steemleo •  5 years ago 

Today I look into what has been happening to the biggest and deepest government bond market in the world. The U.S. Treasury market is the benchmark for all government bonds worldwide and it also provides the reference "risk-free rate of return" that helps price all assets in the financial world.

Recently though with the volatility in the stock market and the financial system, the integrity of the U.S. Treasury bond market has been put into question and one cannot also separate the reop market troubles that emerged in September of 2019 from what is going on in the Treasury market.

My conclusion is that the loose monetary policy that Central Bankers have implemented since the Crisis of 2008, derivatives, volatility and most importantly leverage are the biggest reason why the whole of the global financial system is now at risk.

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Thanks again for the education, Maneco64. It's gambling. Immoral. Rigged, not in your favor.

I think the problem is the amount of melting derivatives are bigger than the liquidity FED is going to provide, isn't it?

Yes, you are right. One thousand trillion or a quadrillion is even too big for Kuroda San!