From Jeannine - Lions Alert! A "Credit Event" May Be Closer Than We Think. (This Is What JUST Happened).

Greg Mannarino . . . . . Article

Lions, when you see the New York Fed quietly dragging Wall Street Power Brokers into a room to talk about a “key lending facility,” it means the credit markets are breaking... PERIOD.

It means that banks are low on cash.

The fact that the Fed is meeting with Wall St. Superbanks to discuss liquidity issues is MASSIVE. This is not 2008-level panic yet, but the system needs more and more backstops just to function.

Here’s what just happened.

The New York Fed president, John Williams, quietly called a meeting with the big Wall Street dealers (the banks that handle US government debt).

Topic… a “key lending facility” called the Standing Repo Facility (SRF). Reason… stress is showing up in short-term funding.

Lions. Repo = overnight pawn shop for Wall Street.

It works like this. A bank or dealer says, “Here, hold my Treasuries (or other collateral) and give me cash until tomorrow.” On the next day, they buy them back at a slightly higher price. That tiny difference = the repo interest rate.

Why it matters.

This is the day-to-day “lubricant” of the financial system which maintains the illusion of liquidity. If repo works, banks and dealers roll funding smoothly. If repo doesn’t work, the system can seize up very fast.

What’s going wrong?

The Fed has a target range for short-term rates. Now, some repo rates have been trading above that, meaning cash/liquidity is drying up and borrowers are paying more just to get overnight money. 

KEY POINT… it means that banks are running low on cash. (Imagine if that got out to the public? BANK RUNS. BANK RUNS. BANK RUNS.

If it were made public that a particular bank, or banks plural, were becoming more dependent on Fed Repo, (and this would get out pretty quickly), it would send a message… “If people find out we tapping the Fed for cash/liquidity, they think we’re in trouble.”

Lions…

The bottom line is ALL the banks are in trouble, along with the entire financial system, which operates in a state of negative liquidity/a black hole.

The fact that the Fed is calling for a meeting about liquidity is not just a tell, ITS A CONFIRMATION, that the system is flirting with a full on credit event/a locking up situation.

To the regular non-Lion walking the street in their every day wonderland, the system only looks “normal,” as long as the Fed stands ready with more backstops.

KEY POINT.  The Fed can create all the fake liquidity facilities it wants, and continue to backstop the entire system, but all this is doing is KILLING the currency faster, and vastly inflating the debt. This is leading to an economic wipeout situation which is unfolding in real time.

Lions… when you get sudden “emergency” announcement like this one, with the Fed calling for a meeting with the Wall St. Power Brokers over liquidity issues… you know there is a serious problem. And we have know this all along…

So what will likely be the result of this Fed/Wall St. Power Broker meeting?

Expect more “temporary” liquidity operations, and more “money” creation out of nothing to keep the machine zombified. Expect MUCH lower rates, and therefore MUCH more debt…

Lions… Expect the same pattern we’ve talked about for years. Crisis, New backstop, More debt, Weaker dollar, Economy craters.

LIONS KEY POINT.

This another sign that this hyper-debt, hyper-leveraged system cannot run on its own.

It constantly needs new backstops, new tricks, and ultimately a new system brought forth out of the shadows… (think Stablecoin Token/Genius Act).

And THAT… is just the beginning.

GM