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yes but you miss the point... only primary dealers can access this... NLY is not a primary dealer
Primary Dealers (such as Banks) hold NLY paper as collateral and can repo it to FED. This helps NLY by allowing its primary Lenders to liquify it at FED.
yes but they have to repo it at market value and agency paper trading below par at current market prices
Repos are loans, they have to be paid back. how does this help the narket for Agency paper? You think the fed is going to buy it back at a higher price then they paid for at expiration?