/biz/ - Business & Finance

>>17855285
its kinda above my paygrade to explain in detail
look up what stock buybacks are
then look up what overnight repos do

corps have been, since rates got brought to nil in 08/09, buying their own stock on lev (borrowed from banks obv).
this makes shareholders happy so theyve done it for years now.
banks, who were starved for rates after being regulated, looked to corporations for their risky rates so they could get yield at all (what they were getting from subprime memes before).
since stonks go up, the corps are seen as good borrowers, so this creates a credit feedback loop.
go take a look at TSLA NFLX FBs etc corporate bonds.
yields at like 7-8%
thats been banks bread and butter for a decade now

its much more complicated than this even tho, as corporate debt doesnt even need to pay principal on maturity. they can just roll out to more. so i have NO fucking idea how much needs to be unwound.

>the banks can now borrow for free AND have 0% reserve requirement, meaning they can lend to each other
i believe thats exactly the reason for all the fed nonsense recently. its the only way i can explain them dropping rates so early.
>can they lend to themselves???
i think thats where were going. im not sure how else to do this quick enough

>but what would you say are some fairly safe bets in lieu of all this, either for puts or shorts?
idk man im just some scrub who likes to autism ovevr numbers. i cant give you advice.
if what im saying is correct (pls god no), you wanna long USD, and short almost everything else. boomer rocks are still way too high if we ARE in a deflationary crisis, so that would be a thing that would correct dramatically.

personally ill be looking for whatever corporations have the highest yield, junkiest bonds, and have been doing stock buybacks the most.

the problem is, if im right about this, then you dont want your money in the BROKERAGE either.
thats whats so absolutely fucking terrifying about this possibility