Warlord
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Peter Schiff Q&A
- Thread starter Warlord
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BortSimpson
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I was just about to post this. 
BortSimpson
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I'm only a couple of minutes into the George Gammon video and I can't even process the numbers I'm seeing. Can someone explain what these "Overnight Repo's" vs "Term Repo's" are?
Is the "O/N Repo" a loan for just 1 night and so it gets paid back very quickly?
And the "Term Repo" is a loan for a limited term (I assume longer than overnight) like, for example, maybe 3 months?
Does that make the amounts ($13.65T) a little less insane because the length of the loans are really short?
Also, I saw a video on Khan Academy about what a Repo is (a repurchase agreement where you use something as collateral against a loan. You actually own the thing during the time the time the borrower still owes you the money. But you agree to let the borrower purchase it back from you at an agreed upon amount. The repurchasing by the borrower is the equivalent of paying back the loan. And if the borrower doesn't repurchase it then the lender owns it for good). However, what is the stuff that is being purchased? And why did they choose to do a repo instead of a regular loan (which works the same way except that the lender doesn't own the collateral during the time the borrower is still borrowing the money).
Basically I have many questions about this. I'll continue watching the video in the meantime to see if I can figure this out.
Is the "O/N Repo" a loan for just 1 night and so it gets paid back very quickly?
And the "Term Repo" is a loan for a limited term (I assume longer than overnight) like, for example, maybe 3 months?
Does that make the amounts ($13.65T) a little less insane because the length of the loans are really short?
Also, I saw a video on Khan Academy about what a Repo is (a repurchase agreement where you use something as collateral against a loan. You actually own the thing during the time the time the borrower still owes you the money. But you agree to let the borrower purchase it back from you at an agreed upon amount. The repurchasing by the borrower is the equivalent of paying back the loan. And if the borrower doesn't repurchase it then the lender owns it for good). However, what is the stuff that is being purchased? And why did they choose to do a repo instead of a regular loan (which works the same way except that the lender doesn't own the collateral during the time the borrower is still borrowing the money).
Basically I have many questions about this. I'll continue watching the video in the meantime to see if I can figure this out.
