"Central Banks are panicking... the whole system is on the verge of disappearing into a black hole."
- Egon Von Greyerz on USAWatchdog.com
On Wednesday, after the overnight repo operation had $92 billion in demand for the $75 billion operations, the Fed announced that it was increasing overnight repos to $100 billion and doubling the two-week term repo operations to $60 billion. Well, that escalated quickly.
The rationalization is "end-of-quarter liquidity needs" by the banks, which have to increase reserves against assets (loans) or face taking earnings write-downs. But this dynamic occurs every quarter, and