Enjoyed the write up; far better than the hot takes over on X. On the 12 yards of repo $JEF shows- do we have any idea what that split is between bilateral and tri-party? The only potential chink I see in their armor is if bilateral counter parties don’t roll the daily repo, similar to what put Bear in a squeeze 17(!) years ago. Obviously triparty reduces that risk because it’s blind…only risk there is BoNY decides they aren’t going to allow them on the platform and at that point they’d already be goners IMO.
Other counterpoint to the bilateral repo- just remembered they are a primary dealer and thus have access to the Fed’s Standing Repo Facility. So it wouldn’t be fun paying the SRF rate but they’d stay alive to fight another day.
Enjoyed the write up; far better than the hot takes over on X. On the 12 yards of repo $JEF shows- do we have any idea what that split is between bilateral and tri-party? The only potential chink I see in their armor is if bilateral counter parties don’t roll the daily repo, similar to what put Bear in a squeeze 17(!) years ago. Obviously triparty reduces that risk because it’s blind…only risk there is BoNY decides they aren’t going to allow them on the platform and at that point they’d already be goners IMO.
Haven’t been able to track that down yet. But you are correct.
Other counterpoint to the bilateral repo- just remembered they are a primary dealer and thus have access to the Fed’s Standing Repo Facility. So it wouldn’t be fun paying the SRF rate but they’d stay alive to fight another day.