The Ballad of the Repo Trader

Times are tough for traders in the so-called repo market, where a wide variety of banks and investors pawn their assets in exchange for short-term loans. The market was ground zero for the financial crisis, with a pullback in repo funding blamed for Lehman Brothers' collapse. New rules implemented in the wake of the crisis have seen a dramatic decline in repo usage in recent years, with many now looking to shrinking repo to help explain a series of recent dislocations in the wider market.

If repo traders were inclined to write ballads, we think this is what they might say.

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