Ep120: Shadow Banking and Repo Madness

Mary Ellen Tuthill was born and raised outside of Boston, Massachusetts. A graduate of Boston College with a BA in American History she went on to earn two master’s degrees, an MA from the University of Maryland in American Studies and an MS from Syracuse University in Communications. A self-described “perpetual student,” she worked for ten years as a radio news anchor and reporter. Family obligations precluded her moving to advance her career. It was time for a change. For the next 13 years she would work as a financial advisor also penning a financial planning column for the local paper. Eventually the rough and tumble of the securities business took its toll, and she embarked on a third career as a full-time financial writer. Her employer was iMoneyNet, the go-to place for money-market mutual fund data. Over 11 years she wrote hundreds of stories for the firm’s flagship publication, “Money Fund Report.” She also wrote for other publications, all related to money market funds. Hired in 2006, initially the work was uninspiring. What can you say about money-market mutual funds? Then came the financial crisis and everything changed. What had been a job writing about sleepy money-market mutual funds turned into a journey deep into the recesses of shadow banking. For money-market mutual funds played an integral role in the financial meltdown that dwarfed all others. Tuthill was hooked. She wanted to learn everything about shadow banking and as the days, weeks, months, and years passed, hundreds of articles, scholarly papers, marketing material from the banks and government reports. Laid off in 2017, Tuthill found herself with boxes and boxes of material. Her first task was to organize it by subject. Then, she continued to pursue her research. The result is “Repo-Madness: A Simpleton’s Guide to the Street’s Wicked Ways.” Listen to this insightful RIA episode with Mary Ellen Tuthill about shadow banking and her book, Repo-Madness. Here is what to expect on this week’s show: - How shadow banking evolved outside the purview of regulators in the 1980s and is largely misunderstood by the public. - How investment institutions started using repos to manipulate trading strategies in massive amounts. - Why many people don’t know what shadow banking really is, including economic professors and experts in the field. - How repo agreements refer to short-term overnight loans involving trillions of dollars used by financial institutions - Why low interest rates make people overlook the potential risks of not rolling overloads every day. Connect with Mary Ellen: Links Mentioned: https://www.amazon.com/Repo-Madness-Simpletons-Streets-Wicked-ebook/dp/B0C2SRMXZP/ref=sr_1_2?crid=3EJFQ9ZXCZ314&keywords=repo+madness+book&qid=1693274589&sprefix=repo+madness+book%2Caps%2C261&sr=8-2