Part 11/11:
In essence, today’s market signals point to an escalation that cannot be dismissed as simple technicality. The rapid increase in repo borrowing, heightened rate volatility, and parallels to 2019 suggest that the financial system remains vulnerable, especially under risk aversion and collateral stress.
As the weekend unfolds, market participants and policymakers alike should remain vigilant. The shadowy cockroaches—hidden risks in credit and collateral markets—may be lurking closer to the light than expected, threatening broader instability if not addressed carefully.
Until more data emerges, caution and scrutiny are the watchwords. The coming weeks will be critical in determining whether this recent escalation is a temporary storm or a sign of deeper systemic weakness.