Wedbush's Scott Skyrm said...>

US TSYS/OVERNIGHT REPO: Wedbush's Scott Skyrm said about Friday's (Dec. 29)

Year-End that "it's all about the "window dressing. As year-end approaches,

banks, hedge funds, investment funds, and other market players reduce the size

of their balance sheets to appear less leveraged or to avoid capital charges."

- "The result is a combination of securities and cash leaving the Repo market,"

Skyrm said. "The imbalance between cash and securities determines if there's

funding pressure or soft funding. For example, if a lot of cash is pulled from

the market, there is funding pressure. With more securities gone from the

market, there is softer funding. So far, the expected dislocation this year-end

does not appear to be severe, but anything can happen tomorrow."