by Jeffrey P. Snider
It’s not an exact fit or correlation, but that’s not the point. One follows the other, though the manner in which they relate is outside of any view. The point here is common sense, unclouded by the increasing absurdity with which this simple relationship is denied:
[…] Repo fails are an indication of collateral “tightness.” Dealer net long inventory is an indication of collateral hoarding. How and when one becomes the other is a matter for the markets themselves. Why and what it means is what this is all about.