Reddit Sounds Crash Alert on Fed’s Overnight Repo Numbers

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  • Retail traders on Reddit are theorizing that signs of a market crash are being signaled by a complex Fed program.
  • Reddittors are closely watching the growing use by big firms of the Fed’s reverse repo facility.
  • A number of theories have surfaced on Superstonk, a subreddit with 679,000 members.

Retail traders on Reddit are theorizing that a market crash is imminent, with one sign of a crash trumping all others: the Federal Reserve’s overnight reverse-repurchase agreement facility.

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A recent Bloomberg report revealed how this complex facility has drawn the eye of Redditors on a forum called Superstonk, a subreddit that boasts 679,000 members, far smaller than Wall Street Bets’ 11 million.

Similar to the now-famous Wall Street Bets, Superstonk is dedicated to discussing business and stocks, specifically GameStop. In the forum’s keen observation of the Fed’s reverse repo facility, it differs.

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The Fed’s reverse repo facility allows big institutions – mostly big banks and money-market mutual funds – to buy securities from the Fed with an agreement to sell them back to the central bank for a specified price at a specific time.


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