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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: fut_trade who wrote (2067)	12/16/1999 3:19:00 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 19219

well, the effect is not so easy to quantify, as liquidity additions are subject to a multiplication effect. basically though, a repo has a fixed term, meaning it is reversed at the terms end (and likely replaced with another one if deemed necessary by the FOMC). a coupon pass is a permanent reserve addition. rarely is the Fed engaging in outright sales of coupons, which amount to a reversal of the pass. so you could say that the repo's effect is short term and the coupon pass has a long term (permanent) effect. the treasury has today added liquidity through the back-door with another neat trick: Message 12306467 Message 12306832 regards, hb