Brian Chappatta, Columnist

Repo Oracle Claims Victory Even If Fed Skips QE

An ominous warning from Credit Suisse’s Zoltan Pozsar may not pan out at year-end.

December 24, 2019 at 11:00 AM UTC

Brian Chappatta is managing editor of Bloomberg News' leveraged finance and distressed debt teams. He was previously managing editor and team leader of its wealth group. Before that he was a Bloomberg Opinion markets and finance columnist and a bonds reporter for Bloomberg News.

Don’t expect the doomsday scenario.
Photographer: H. Armstrong Roberts/ClassicStock/Getty Images

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Imagine you are a longtime Wall Street denizen, accustomed to analyzing trends in the public equity markets, sovereign interest rates, foreign exchange and corporate credit. You think you have a good handle on all these large asset classes.

But suddenly, the plumbing of the entire financial system goes haywire in mid-September, and no one knows why. You are fielding questions about the overnight repurchase agreement market and whether this is another banking crisis in the making. Scouring previous research, you see that one analyst at Credit Suisse AG was warning about a potential repo squeeze before this episode happened. His name: Zoltan Pozsar.