ll11

sct123 Wrote:
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> look at it this way:
>
> new UST gets issued. a dealer ends up short the
> issue for whatever reason and has to make delivery
> or he will fail. the UST issue happens to be in
> short supply since investors want to own the new
> issue. Since the UST is in short supply and the
> dealers need to buy the issue or they will fail,
> the issue is considered on special or hot. You
> come along and happen to own some. the dealer is
> willing to give you a repo (lend you money) for a
> lower rate or even sometimes a close to zero rate
> in order to get their hands on the collateral you
> have.

That's an interesting way to look at it, but it's simply incorrect.

On the run Treasuries are never "in short supply" - you're trying to justify an incorrect answer and most likely confusing people.