Lurking Beneath The Taper: More Trouble In Repo Land | David Stockman

``The problem of QE in repo terms was that it not only stripped usable collateral from dealer inventories and from other holders where it might be used as supply, it has seemingly diminished the entire repo market's capacity to withstand even a relatively minor increase in volume.  What was normal in 2013 seems to create something of a stir in function in 2014... The problem for "markets" is that this is a primary liquidity conduit indicating significant and persistent degradation under, again, very benign conditions.  In my analysis, there is no doubt that QE is the primary culprit here and that its removal is not "allowing" a healing process to begin but instead revealing the damage. ''