by David Kranzler
Investment Research Dynamics
The Fed is trapped. If it stops adding money to the money supply, the stock market will crash. It’s already extended the repo money printing program twice. The first extension was to February and now it has extended it again to April.
What was billed as a temporary “liquidity problem” in the overnight repo market is instead significant problems developing in the credit and derivative markets to an extent that it appears to be putting Too Big To Fail bank balance sheets in harm’s way. That’s my analysis – the official narrative is that “there’s nothing to see there”.