This past Friday, Dave Kranzler of Investment Research Dynamics put out a very thoughtful article and chart regarding the spike in “reverse repurchase agreements”
RRP’s held at the Fed http://investmentresearchdynamics.com/tag/reverse-repo-agreement/.
The chart in question shows three very distinctive spikes:
The first was Sept. of 2008, again in 2011 and the current spike. It is Dave’s contention that something behind the scenes has or is blowing up financially.
Let me explain what I believe is happening, I do not disagree with his theory but I think he may have stopped just one step short of the full story. By adding one more chart in a moment, I’ll try to explain. …