The Big Short 2: Repo Markets

2008 Global Financial Crisis reforms have made banks more risk averse. Which means the Fed is going to have to take up the slack. Which they've found out. The hard way.
 
bone said:
Look at where the actual Bank Reserves were in September of 2019. (Hint: they were very low and fixed income dealers had been warning the Fed about the lack of securities liquidity for months)
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I still do not see how does lack of desirable collateral translate into higher repo rate? If everyone is flush with cash, has balance sheet aplenty and wants those very bonds on their balance sheet, the rate should be below unsecured. We saw the opposite.

P.S. dealers did complain about lack of liquidity and inability to sell bonds from their balance sheet
 
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