Zero Hedge/Scott Skym/10-18-2022
“What’s important is the unknown unknown. That’s the ‘wild card.’ Right now, the risk lurking in the shadows is Balance Sheet Runoff. The Fed, the markets, the regulators, and even us Repo guys have limited experience with the Fed shrinking the balance sheet. Bottom line: there’s a risk that Balance Sheet Runoff will break something. On top of that, no one’s talking about it!”
USAGOLD note: A unique look at the repo market from Scott Skym, an experienced participant. … He calls the repo market “a window to what’s going on behind the scenes.” We too believe that QT could break something – the repo market being just one of many potential black swans. Skym is the executive vice president of Curvature Securities.
