TSFL Auction - Tepid Response
The Fed's will be lending $75 billion for 28 days after its first Term Securities Lending Facility auction.
However, the banks treated the auction like buyers are treating the current real estate market.
From Briefing.com... The TSLF auction results were akin to a seller listing a house for $300K in a weak housing market only to see multiple bids come in at $200K.
It can be said that demand for the asset is technically high, but only at a discounted price,
implying the buyers don't really need to buy the asset but they will if they get it at an extremely discounted rate.
The Bid-to-cover at 1.15 (there's the demand) but stop-out rate at 0.33% (there's the recognition it isn't really needed).
However, the banks treated the auction like buyers are treating the current real estate market.
From Briefing.com... The TSLF auction results were akin to a seller listing a house for $300K in a weak housing market only to see multiple bids come in at $200K.
It can be said that demand for the asset is technically high, but only at a discounted price,
implying the buyers don't really need to buy the asset but they will if they get it at an extremely discounted rate.
The Bid-to-cover at 1.15 (there's the demand) but stop-out rate at 0.33% (there's the recognition it isn't really needed).
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