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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: RJA_ who wrote (69512)	9/8/2006 2:58:24 PM
From: bart13	Read Replies (1) \| Respond to of 110194

Bart, could you talk a little about repos and how they work and also how they might effect the value of the dollar? There's a lot of data on my site - nowandfutures.com - on both the fed watch and glossary pages, and I'm also not sure what you want to know so I'll just punt a little from a high level. There are two types of Fed repos - temporary (1-64 days or so) and permanent (which never expire). The simplest way to define a repo is basically as a loan. The Fed offers some amount almost every day and a percentage of what they offer is actually loaned out to various banks and Fed primary dealers. Where it gets a bit dicey is assumptions that are made on mine and others charts and thoughts... but basically the theory is that the big banks use the loans to support and manipulate various markets. My current working theory is that perm repos tend to support the dollar, and temp repos (and TIOs and other money) tends to be used to support the stock markets. As far as affecting the dollar, just consider what an extra billion or two could do in the forward and/or futures market if it was used to buy dollars. Better?