NECRO'd: FED having to put money into the overnight repo market?

[FromMyColdDeadHand]

UPDATE 11/21
Posted here for historical data and references. I think that big money knew about COVID in mid Sept 19. THe Virology institute took their data base off line on Sept 12, the overnight fed funds rate and market went GOOOFY soon after- like they were worried about a Black Swan event. The best explanation of this is that some people knew about COVID and the high probability of a global pandemic. It would be interesting to look at shorts positions.


***** Update ******
Someone had another thread about the FED intervention in the overnight market. As you can see from this thread, this is nothing new- but it a recent phenomena, and by phenomena, I mean there isn't a widely agreed upon reason for it, except since Corona when everything is goofy.

I hope this gives some background and understanding.

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https://www.breitbart.com/economy/20...-system-again/

Here’s how it works. Traders at the big Wall Street firms put in bids to borrow cash overnight and cash investors accept bids, typically striking deals by 10 a.m. The bids are promises to pay an interest rate and a pledge to post securities as collateral. After the market closes at the end of the day, the securities get allocated to the cash investors. The following day, at 8:30 in the morning, the repos get unwound. The cash investors get their cash back and the Wall Street banks get their securities back. Then it starts all over again.

At the start of the week, the repo rate unexpectedly jumped higher, indicating that there was a shortage of dollars compared with demand. On Tuesday, the Fed stepped into the market by supplying $53 billion of cash in exchange for securities. On Wednesday, the Fed supplied $75 billion of cash–and said it had bids for an additional $5 billion of repos. On Thursday, the Fed supplied $75 billion again and said this time the facility was oversubscribed by nearly $9 billion.

What the heck is going on here? Not looking for an anti-FED punchfest. Looking for why something like this is going sideways. This money flows like the tides- in and out, like a metronome.

Buddy has a degree in finance and he is scratching his head too.

Is this like all the water rushing out when you are at the beach? We know what that means.