Is a bank collapse coming due to bank exposure to collateralized loan obligations as defaults increase? Topics covered include What are collateralized loan obligations (CLOs), how are they structured, and what has been their historical default rates. How much exposure do banks have to CLOs and will it impact your bank savings and investments. What are bank capital ratios and how are they calculated. How banks are more conservatively run due to the adoption of the Basel III … [Read more...]
270: Repo Rates Soared—Here’s Why It Matters
How a liquidity crunch in the short-term lending markets sent interest rates soaring. Why this is a huge blunder on the part of the Federal Reserve, and what it means for us as individual investors. In this episode you’ll learn: What are repurchase agreements and how are they used to finance U.S Treasuries. How outflows from money market funds and hoarding by banks led to a liquidity crunch that caused repo rates to spike to 10%. Why banks are hoarding reserves held at the … [Read more...]