Hello eshmun,
I know you had an interest in the Fed’s intervention in repo markets earlier this year. In this interview (I haven’t watched to the end) Hamish Douglass of Magellan Funds talks to Janet Yellen and we get an interesting insight into the level of intervention that took place back then. Two trillion $US pumped into Treasuries to offset an unprecedented selloff by highly leveraged hedge funds and overseas players. Definitely a catastrophe avoided for now.
Topic begins around 6:30 mark on video....
I personally don’t believe a large, systemic crash is coming though short, sharp corrections are imminent imo. The Fed must, by necessity, continue to step up and protect the market from collapse. Of course this results in a grossly obese market built on cheap and protected money and a plainly inefficient allocation of resources but the costs of not protecting the markets as they have become is just too scary to think about. Consider, just for starters, the vast wealth held in public pension funds (police pension funds and alike).
