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Concoda is a macro and geopolitical newsletter focusing on financial systems post-2007/08 crisis, the evolving role of central banks, and shifts in monetary policies. It discusses regulatory impacts, Treasury and Fed maneuvers, repo and Eurodollar markets, money market dynamics, and global finance's future amidst emerging market challenges.

Central Banking Monetary Policy Regulatory Standards Global Finance Market Dynamics Financial Stability Geopolitical Impacts

The hottest Substack posts of Concoda

And their main takeaways
281 implied HN points β€’ 25 Jan 25
  1. The U.S. government is depleting its bank account during a debt limit issue. This means they have less money available to spend.
  2. There are flows and processes involved when the government runs out of money. Understanding these flows can help clarify the financial situation.
  3. The information is presented in both dark and light mode, which makes it easier for different people to read and understand.
383 implied HN points β€’ 23 Jan 25
  1. A funding squeeze is turning into a big increase in cash availability. This change is happening as market conditions ease, but new issues like the debt ceiling are causing uncertainty.
  2. The financial system has a lot less cash than it had in the past, partly because of changes in how money markets operate. There hasn't been serious funding stress recently, which is a good sign.
  3. Another cash surge is expected to hit the banking system soon. As the Treasury reduces its cash cushion, this could lead to more market volatility down the line.
378 implied HN points β€’ 19 Jan 25
  1. The upcoming U.S. presidential inauguration and a new Treasury Secretary may lead to changes in the money market. This could create opportunities for profits.
  2. The debt ceiling issue is affecting liquidity and will lead to market volatility. When resolved, it will change the flow of money in the markets.
  3. Foreign investors are becoming more interested in U.S. Treasuries due to better returns. This could impact how these markets operate in the near future.
464 implied HN points β€’ 05 Jan 25
  1. The Federal Reserve took steps to manage money market pressures around year-end, which helped stabilize the situation. They provided morning repo operations to encourage lower trading rates.
  2. Despite these efforts, many traders still chose not to use the Fed’s cheapest repo options, which showed a lingering fear about using those facilities. This meant that repurchase agreements still traded at higher rates.
  3. Looking ahead, the debt ceiling is expected to cause uncertainty in the money markets. As people prepare for this, interbank liquidity may increase, but it won't necessarily make funding any easier.
286 implied HN points β€’ 06 Jan 25
  1. The intraday repo market shows how cash moves between banks and institutions. It's important because it helps maintain stability in the financial system.
  2. Visual infographics can help people understand complex market flows clearly. They make the data accessible and engaging for everyone.
  3. Tracking daily repo market timings is useful for understanding financial trends. It allows investors to make informed decisions based on current market conditions.
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464 implied HN points β€’ 19 Dec 24
  1. Demand for funding is very high right now, causing banks to struggle. This could lead to big changes in money markets by the end of the year.
  2. Many traders are looking for ways to finance their stock trades, leading to more activity in repo markets. This means borrowing money using stocks as collateral is becoming common.
  3. There's a big challenge with U.S. government debt right now. The banks need to buy up a lot of unwanted debt at a time when borrowing money is getting tougher.
318 implied HN points β€’ 09 Dec 24
  1. The Federal Reserve is not worried about the debt ceiling impacting its plans to reduce its balance sheet. They believe liquidity in money markets is still high.
  2. The U.S. Treasury has enough resources to manage until around mid-2025, but any delays in addressing the debt ceiling could create funding issues.
  3. Equity repos, which involve borrowing cash using stocks as collateral, are becoming more popular. This trend is linked to rising demand and values of equities.
367 implied HN points β€’ 24 Nov 24
  1. The Fed's Repo Facility helps provide emergency cash loans to banks when needed. This is crucial during times of financial stress to keep the market stable.
  2. Recently, there have been instances where dealers didn't fully utilize the available funds in the repo facility, indicating issues with how it's being accessed. This suggests that the process needs improvements to encourage more usage.
  3. The Fed is looking to make changes to the repo facility to fix its shortcomings and ensure dealers can quickly and efficiently obtain emergency funds when crises arise.
324 implied HN points β€’ 27 Nov 24
  1. The Federal Reserve plans to keep reducing its balance sheet until at least 2025. This is to normalize financial conditions rather than to tighten the economy.
  2. Recent changes in interest rates show that the Fed is trying to clear extra cash from its programs. This could help push down short-term borrowing rates and shake up financial markets.
  3. Despite a strong U.S. dollar, there's still good liquidity available in the markets. This offers potential support for riskier investments as banks might adjust their capital due to rising stock prices.
508 implied HN points β€’ 20 Oct 24
  1. The Fed's repo facility has been used for the first time by major market players during a tough financial period. This shows it can help keep rates in check, but there are still issues to address.
  2. Over the past few years, the Fed's approach to managing its balance sheet has led to unstable liquidity in money markets. This instability caused significant rate spikes and raised concerns about the overall health of the financial system.
  3. When money market rates soared unexpectedly, it prompted the Fed to step in as a major lender. This was a significant move to bring balance back to the financial markets and highlight the Fed's critical role in managing economic stability.
216 implied HN points β€’ 25 Nov 24
  1. The Federal Reserve has a special tool called a repo facility to manage money supply in the economy. It helps banks borrow money quickly when they need it.
  2. This repo facility can provide short-term loans to banks, which helps keep the financial system stable. It's like a safety net during times of financial stress.
  3. Understanding how this facility works is important for grasping the bigger picture of economic stability and the Fed's role in it. It helps us see how money flows in the economy.
308 implied HN points β€’ 26 Oct 24
  1. The money market faced a tough quarter-end, but there were no serious problems reported. Most banks didn't heavily rely on the Fed's emergency funding options this time.
  2. A new measure called reserve demand elasticity (RDE) suggests that the banks currently have enough reserves. This means the Fed can keep interest rates stable for now.
  3. Funding pressures are growing, but they haven't reached a critical point. This signals that while banks feel some strain, they are managing for the time being.
513 implied HN points β€’ 13 Feb 24
  1. The Federal Reserve's Bank Term Funding Program (BTFP) is expiring after being used to address financial panic and market stimulation caused by banks' underwater assets.
  2. Following a series of bank failures in the aftermath of COVID-19's speculative boom, the Fed introduced the BTFP to provide a confidence boost and stabilize markets.
  3. The BTFP evolved into a risk-free arbitrage opportunity for banks, leading to its rapid increase in volumes before its sudden discontinuation in March 2024.
367 implied HN points β€’ 07 Mar 24
  1. Higher bank reserves and lower Fed RRPs indicate looser financial conditions continuing.
  2. Falling bond volatility suggests a stable market.
  3. Tighter cross-currency bases point to ongoing financial stability.
286 implied HN points β€’ 28 Feb 24
  1. Readers value infographics as much as articles; 90% of the time spent creating a Concoda article is on graphics
  2. Infographics will now be sent as separate posts for immediate access and subscriber interaction
  3. Light versions of infographics will be included for subscribers, and a merch store is in the works as well
264 implied HN points β€’ 11 Mar 24
  1. The Repo Market is undergoing significant changes, with a shift to a secured monetary standard and challenges in the system prompting new adaptations.
  2. The Repo Market has become more systemic and fragmented, with different regions defined by various participants, securities, and settlement methods.
  3. The presence of triparty and interdealer markets within the Repo Market highlights the importance of central clearing in reducing risks and enhancing liquidity among major financial players.
286 implied HN points β€’ 20 Feb 24
  1. Dollar liquidity remains high with low failures to deliver, stable bond volatility, tight dealer repo spreads, and tightening cross-currency bases
  2. Changes in the Fed's rescue mechanism are upcoming, as discussed in a recent post by Concoda
  3. Exploration of the transformation in the repo market and its potential impact on other dollar markets
308 implied HN points β€’ 26 Jan 24
  1. The U.S. repo market is crucial for dollar funding but lacks transparency.
  2. The GCF repo serves as an interdealer market where traders compete for market-making spreads.
  3. Understanding the inner workings of the GCF repos unveils influential chains in global finance.
794 implied HN points β€’ 01 May 23
  1. The banking system has evolved significantly post the 2007/08 Great Financial Crisis, leading to changes in global monetary standards and U.S. central bank's mechanisms.
  2. Regulatory standards like LCR, NSFR, and SLR have transformed major financial institutions into stable entities, impacting their ability to engage in certain financial activities.
  3. The Federal Reserve introduced new mechanisms like Jaws of the Fedβ„’ to control money market rates and ensure financial stability, but faces a dilemma with vulnerabilities in its global lower jaws.
653 implied HN points β€’ 27 May 23
  1. Monetary leaders are implementing new tools to prevent instability in the bond market and stimulate risk assets without central bank assistance.
  2. Regulatory constraints have hindered major liquidity providers in the Treasury market, leading to the need for Treasury buyback programs to enhance liquidity.
  3. The U.S. Treasury is set to conduct buyback programs in 2024 to manage cash, boost liquidity, and potentially lower expenses and yields in the secondary Treasury market.
151 implied HN points β€’ 19 Mar 24
  1. Bond volatility is decreasing while dollar liquidity remains strong, but future macro events will play a role in its sustainability
  2. Recent changes in the repo market are being discussed to understand how regulations will impact its structure and trades within it
  3. Stay informed with regular updates on money market situations and rates to track financial trends
437 implied HN points β€’ 18 Jun 23
  1. The repo market plays a crucial role in providing liquidity to the financial system globally.
  2. The repo market structure involves lenders like money market funds connecting with borrowers like hedge funds through various intermediaries.
  3. Recent changes in the repo market dynamics may lead to the Fed utilizing it as a tool for market stimulation.
356 implied HN points β€’ 07 Aug 23
  1. The interbank market has changed significantly due to regulations like The Dodd-Frank Act and The Basel Framework.
  2. Banks are now less willing to lend to each other, with the shadow banking layer taking on their previous roles.
  3. The Federal Funds market, once vital for dollar funding, is in decline as a result of these shifts and regulations.
594 implied HN points β€’ 07 Feb 23
  1. The Federal Reserve has gained significant power in financial markets due to the transition to secured lending standards.
  2. The traditional benchmark rate LIBOR is being phased out in favor of risk-free rates like SOFR, ushering in a new era of financial stability.
  3. The reliance on U.S. government securities is increasing, leading to the Federal Reserve having growing control over global finance.
502 implied HN points β€’ 21 Mar 23
  1. There is a hidden battle within America's sovereign debt market that is about to transform.
  2. The regulatory focus is shifting towards increasing transparency in the Treasury market to subdue systemic risk.
  3. Implementing all-to-all trading in the Treasury market could democratize the market, enhance liquidity, and improve market resilience.
356 implied HN points β€’ 25 Jun 23
  1. Money markets are markets for lending and borrowing money efficiently
  2. Dealers borrow cash using repo and lend it out in reverse repo to earn a profit from the spread
  3. Understanding money market rates is key to navigating financial articles and terminology
389 implied HN points β€’ 12 May 23
  1. Financial markets react swiftly to concerns about America's debt load.
  2. Debt ceiling stalemates can lead to extreme volatility and illiquidity in the Treasury market.
  3. Failing to raise the debt limit poses significant threats to financial stability and global markets.
405 implied HN points β€’ 18 Apr 23
  1. Monetary leaders have created new risks while trying to eliminate old ones.
  2. There is a high demand for ultra-short-term Treasury paper due to an impending debt ceiling drama.
  3. Bilateral repos act as a sponge in the market, absorbing excess cash when the supply of bills is low.