I believe there are two main causes. First, the massive issuance of treasuries used to fund the persistent and growing US budget shortfalls. As the big Wall St

I believe there are two main causes. First, the massive issuance of treasuries used to fund the persistent and growing US budget shortfalls. As the big Wall Street banks have been tasked with buying up treasuries, massive amounts of liquidity have been siphoned out of the market. The Fed Will ultimately have to restart QE (in perpetuity) in order to fund the debt. Second, hedge funds have been taking advantage of the repo markets, funding massive leveraged trades. Of course as the Fed pumps more liquidity into the system, these hedge funds will only ramp up their leverage. This is why Fed lending will be perpetually insufficient, because any increase in lending will just be used to support more and more leverage. It's like throwing paper towels at a water main break.