Remember how bad credit was for awhile after Bear Stearns imploded? Particularly in the repo market? We're back there again. Collateral holders seem to be in a great position in the repo markets as the demand for the stuff, treasuries, almost all special collateral, is soaring. Unfilled trades have been piling up. This gums up the works pretty severely and is beyond bad news if it gets any worse. We mentioned the issues in short, liquid paper markets last week briefly, but the problem seems much more severe now, but still has been getting very little play in the markets. Bloomberg and the Wall Street Journal both seem to have noticed the problem (finally). Let's hope it cools off before things get out of hand.