You are viewing an obsolete version of the DU website which is no longer
supported by the Administrators.
Visit
The New DU. Reply #4: Hedge funds gamed the Repo market to lock-up, destroying Lehman the primary market maker
[View All]
leveymg
(1000+ posts)
Send PM |
Profile |
Ignore
|
Wed Apr-21-10 04:01 PM
Response to Original message |
| 4. Hedge funds gamed the Repo market to lock-up, destroying Lehman the primary market maker |
|
The September 2008 financial collapse was an engineered burn-out. The primary method was a strategic failure of trades on the Repo market, which is the primary vehicle for liquidity under the "supervision" of the NY Fed. The Repo market trades long T-bills that are needed to balance out portfolios with "zero-risk" instruments With the Repo market locked, Lehman Bros. got caught holding the bag, and risk premium went through the roof for all institutional traders. Result - systemic collapse of the credit markets.
All along there was this gaping vulnerability -- a ready-made scam -- just waiting for someone with enough CDS and political pull to make sure the US Treasury would insure their value with public money.
|
Powered by DCForum+ Version 1.1 Copyright 1997-2002 DCScripts.com
Software has been extensively modified by the DU administrators
Important Notices: By participating on this discussion
board, visitors agree to abide by the rules outlined on our Rules
page. Messages posted on the Democratic Underground Discussion Forums are the
opinions of the individuals who post them, and do not necessarily represent
the opinions of Democratic Underground, LLC.
Printer-friendly format
Email this thread to a friend
Bookmark this thread