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For those that had no idea what repo is because finance isn't in your DSL: > Repo rate is the rate at which the central bank of a country lends money to commer

• Chirael 7y ago
  There was a decent podcast on this about a month back, on Bloomberg "Odd Lots": https://www.bloomberg.com/news/articles/2019-11-11/this-is-why-the-repo-markets-went-crazy-and-why-december-could-be-even-worse https://www.bloomberg.com/news/articles/2019-11-11/this-is-w...
  • snarf21 7y ago
    Everyone should listen to this podcast. It is short and informative. I've learned a lot about the difference between fiscal and monetary policy.
  • ewidar 7y ago
    I listened to this podcast multiple time, and found it quite hard to follow. I don't have a heavy background in finance, but in general I have a good enough understanding of the subject. In this case however the language was somehow making it harder than usual.
    • Bootvis 7y ago
      Any specific parts you’d like to understand better? I’m sure someone here is well versed in this topic.
  • sandstrom 7y ago
    I’ve listened to that episode (after another recommendation here, a few days ago). Didn’t find it very informative or good. The podcast discussion was opinionated and obtuse.
• pjmorris 7y ago
  > 'finance isn't in your DSL' That's a great turn of phrase, and a nice mental model!
• Merrill 7y ago
  Most repos involve banks, investment banks, money dealers and various investors. >What Is a Repurchase Agreement? >A repurchase agreement (repo) is a form of short-term borrowing for dealers in government securities. In the case of a repo, a dealer sells government securities to investors, usually on an overnight basis, and buys them back the following day at a slightly higher price. That small difference in price is the implicit overnight interest rate. Repos are typically used to raise short-term capital. They are also a common tool of central bank open market operations. https://www.investopedia.com/terms/r/repurchaseagreement.asp https://www.investopedia.com/terms/r/repurchaseagreement.asp
• tantalor 7y ago
  > finance isn't in your DSL DSL? Not sure I'm familiar with that term. Some tech jargon? \s
• wcoenen 7y ago
  That definition doesn't seem right. The repo rate is just the rate paid on repurchase agreements, a type of risk free, short term loan where collateral is exchanged for cash, then exchanged back again. Central banks shouldn't be involved. The Fed is only involved now as an emergency provider of liquidity. https://en.wikipedia.org/wiki/Repurchase_agreement?wprov=sfla1 https://en.wikipedia.org/wiki/Repurchase_agreement?wprov=sfl...
  • matthewvincent 7y ago
    * And some would say to sneak in a little QE without calling it QE
    • QuesnayJr 7y ago
      It's not QE, unless everything is QE. When the Fed targets a short-term rate, this is just ordinary monetary policy.
  • twic 7y ago
    Confirmed, yardie's definition is straight up wrong. EDIT: It's worth noting that the collateral is usually government bonds (this is called "general collateral", or GC), with bonds from quasi-government bodies like Fannie Mae or the World Bank being the second most common kind. One way to look at repo is that it's a way for companies with a big stock of bonds (eg banks) to pawn them to borrow money. This is usually the cheapest option for them to borrow money at scale, and so the repo rate is seen as an indication of banks' financing costs. Another way to look at it is that it's a way to buy government bonds on credit - you can buy a bond and then immediately repo it, using the money you've borrowed to pay for the bond. You have to pay the interest on the repo until you sell the bond and pay it back, but you never have to come up with a big pile of cash. I have no idea which use case is more common.
    • core-e 7y ago
      > Another way to look at it is that it's a way to buy government bonds on credit - you can buy a bond and then immediately repo it, using the money you've borrowed to pay for the bond. You have to pay the interest on the repo until you sell the bond and pay it back, but you never have to come up with a big pile of cash. And the reason you'd do this is... to lock in yield in a declining interest rate environment?
• gnode 7y ago
  > a real banana and duck tape sold for $120,000, 3 times. There's also the urinal that sold for $1.7M in 1999 https://en.wikipedia.org/wiki/Fountain_(Duchamp)#Art_market https://en.wikipedia.org/wiki/Fountain_(Duchamp)#Art_market
  • rossdavidh 7y ago
    "New tallest skyscraper in the world" has long been recognized as a sign of impending financial collapse. I wonder if one could objectively evaluate "inartistic garbage selling for high prices", as a means of predicting the same? Esthetics is hard to rate objectively, but there would certainly be a consensus agreement on both of these examples.
    • deleted 7y ago
      [deleted]
    • Mirioron 7y ago
      My intuition tells me that the "new tallest skyscraper in the world" and overpriced esthetics aren't so much signs of an impending financial collapse directly, but they're rather a sign of financial security during the past several years. The problem is that the business cycles are... cyclical, which means that long-lasting financial security is likely to be followed by a financial downturn (collapse). Thinking about it more, I'm not even sure what the difference is.
      • rossdavidh 7y ago
        Interesting point. There is a school of thought that frequent, shallow and short recessions are preferable, because if you don't have them you will pile up problems that all fallout during a deep, long depression. If this is true, then as you say, the skyscrapers, ridiculous art prices, etc. are just the most visible indicators of "lots of easy money, being spent stupidly", which is both a result of prolonged financial security and a bad omen.
    • turk73 7y ago
      I figured it was some kind of money laundering scheme.
• JumpCrisscross 7y ago
  > Repo rate is the rate at which the central bank of a country lends money to commercial banks in the event of any shortfall of funds That’s the discount rate. Repo rate is the rate of borrowing under repo agreements. Both private and monetary participants repo. What’s a repo? Secured borrowing. Imagine you want to borrow $100. I quote 2% interest for one year with collateral. So I give you $100 and you give me a claim on your computer monitor. In a year, you give me $102 and I release title to the monitor. If you fail to pay, I get the monitor. This is traditional secured borrowing. There is risk, though. You could trash the monitor before I get it. Or you could refuse to co-operate with my requests. Here’s another way to structure that loan. You sell me your monitor today for $100. You further agree to buy it back from me (and I agree to sell it) in a year for $102. When things work, it’s the same transaction as above. When they don’t, I already have the monitor. That’s repo in a nutshell.
  • salawat 7y ago
    >it's the same transaction... Actually, it isn't. The financial aspect might be equivalent, but look beyond the purely financial characteristics from your phrasing and you also relinquish any utility you'd have gotten out of the monitor in that time. Depending on number of monitors you have and other circumstances, that lends the transaction a very different character from the first. EDIT: Downvotes without substantive replies or explations do nothing to further overall discourse. I stand by my assertion that a classical collateral secured transaction is fundamentally different than a repo as described. I'm open to having my mind changed. Just be aware, I don't look at transactions of value as only being financial in their entirety unless explicitly set out. Other forms of circumstantial value can and do emerge.
    • maest 7y ago
      Financial securities have little utility past their monetary value. Off the top of my head, you give up on any cashflows, such as dividends/interest from the security and maybe also some anciliary rights, such as voting rights or whatever rights bondholders get. However, you account for forgone cashflows by adjusting the repurchase price accordingly. As for the rights, you can recall the repo (it's usually done overnight).
• jhoiure 7y ago
  Why did you go all that way to see a banana and a piece of duct tape? You could have admired that at your local grocery store. That's the reason it sold for $120k.
• nugget 7y ago
  Maybe I'm naive but I assumed the $120k banana "sale" was essentially a fake transaction intended to attract publicity and drive foot traffic to the venue.
  • arkitaip 7y ago
    That or a money laundering scheme.
    • monitorman 7y ago
      I'm not a professional at money laundering, but under most circumstances, you'd want to do it without attracting attention.
• LegitShady 7y ago
  I always assume those stupid art bus are a mix of idiots and money laundering.
• 0xcafecafe 7y ago
  Didn't some comedian eat that banana and they replaced it saying the banana was not part of the art?
• mikorym 7y ago
  > Apparently, money is meaningless. I am not going to argue in favour of the banana. But I am going to argue in favour of (expensive) art. If I had only $10 and $1 would buy me food and shelter, then I would pay $9 for a Monet or van Gogh. Why? Because if I never see or possess an actual Monet or van Gogh, how can I verify things about the past? How can I verify anything? How can I have a physical and complete connection to the past? To take a more historic example, if anything new (and real) about the man called Jesus is discovered, it would be equally valuable to nonreligous people as to religous people. Suppose for a moment that you find Jesus's diary and in it he wrote: "Can people please stop writing four separate accounts of how I am the messiah; I am not." Wouldn't the change that would bring about be more significant than the amounts of money spent in various contexts? For the record, I don't think the Jesus example matters much in 2019. But back in the Renaissance, our connection to the past (and the past's knowledge) was critical. Maybe Euclid's elements is not "art" to you but it sure as hell should be preserved as though it were art. Art and artifacts are to history as experimentation is to science.
  • hj5rae4h4r 7y ago
    > "Can people please stop writing four separate accounts of how I am the messiah; I am not." Wouldn't the change that would bring about be more significant than the amounts of money spent in various contexts? That would be in line with passages like John 1:3 where John insists the purpose of Jesus's piety isn't so he can be messiah, but rather so that the rest can follow his example and become like him. So Jesus claiming there should be no difference between him and us would be consistent with other passages in the bible.
    • mikorym 7y ago
      Alright; a historical artifact that supports that (or any other claim) would be intrinsically valuable.
• Invictus0 7y ago
  What is DSL?
  • synt4x1k0 7y ago
    https://en.wikipedia.org/wiki/Domain-specific_language https://en.wikipedia.org/wiki/Domain-specific_language
• jbverschoor 7y ago
  The banana was eaten. “Hungry artist”