Why The Repo Markets Went Crazy, And Why December Could Be Even Worse
Odd Lots
Bloomberg
4.5 • 2K Ratings
🗓️ 11 November 2019
⏱️ 57 minutes
🧾️ Download transcript
Summary
Back in September, chaos erupted in short-term funding markets, as the cost for financial institutions to borrow reserves soared. Immediately a major debate broke out over whether this represented a systemic problem for the financial system or merely a technical problem with the "plumbing." Things have quieted down since September, but the debate hasn't stopped. And there's still no permanent fix. On this week's Odd Lots podcast, we spoke with Zoltan Pozsar of Credit Suisse, who has a reputation for understanding the mechanics of these funding markets better than anyone else in the world. He broke down what really happened, and why we could see more craziness as soon as next month.
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Transcript
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| 0:00.0 | Join us in New York on November 29th for the Bloomberg Canadian Finance Conference, |
| 0:04.6 | proudly sponsored by National Bank of Canada Financial Markets. |
| 0:07.8 | 2023 marks the 11 year anniversary of our Canada focused event and continues the tradition of providing timely |
| 0:13.8 | insights and actionable strategies. We'll have senior government |
| 0:17.1 | officials from Saskatchewan, Quebec, British Columbia, Alberta and Ontario as well |
| 0:21.9 | as speakers from Northland Power, World Bank, Transolta, and many more. |
| 0:26.0 | Register at Bloomberg Live.com slash Canadian Finance slash radio. Hello and welcome to another episode of the Odd Lots podcast. |
| 0:46.0 | I'm Tracy Allaway. |
| 0:48.0 | And I'm Joe Wiesenthal. |
| 0:49.0 | So Joe, I was in New York with you in early September wasn't I? We did the Odd Lots |
| 0:54.5 | live show. That was early September. Yes I think it was. That already seems like a |
| 0:59.6 | really long time ago to me but yeah that was really fun and we had a great a great lineup |
| 1:05.2 | of guests and it was it was just it was absolutely perfect I wouldn't have |
| 1:09.2 | changed one thing about the lineup of guests that we had that now? There was one thing that I would have changed, which is that we were due to have Zoltin |
| 1:19.2 | Pozar on one of the panels, and unfortunately, he had to drop out a couple days before for a sort of |
| 1:26.8 | last minute commitment but the reason it would have been great to have him there was because something big happened in the markets that same week. |
| 1:36.5 | Right, so I was just trolling a little bit. I agree with you that would have been the one change, that would have been the one thing that would have made it absolutely perfect and of course |
| 1:44.1 | what you're referring to was the tantrum or I'm not sure what we're what word we're using to describe it |
| 1:50.4 | but the sort of craziness the repo madness of early September was right |
| 1:55.6 | around that time and of course Zoltin is by many people considered to be the |
| 2:00.6 | preeminent expert in this area. |
| 2:04.8 | Right, also a former Oddlots guest. |
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