Re: borodog\'s mistaken understanding of M3...don\'t listen to his drivel
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the main reason M3 departs from M2 from 1995-2007 is the increasing use of repurchase agreements by hedge funds and financial institutions as a means to generate leverage.
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Yep.
One of the reasons that some mortgage lenders went belly up was that they got margin calls on their repos when MBS disintegrated. Same thing happened to mortgage lenders during LTCM crisis in the 90's.
It should also noted that the Fed is self funding.<font color="pink"> </font>
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