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It means a healthy economy and tons of deals, if it wasn’t so exclusive the banks wouldn’t have any business but it’s hard to say if it would be bad. I think more and smaller deals would be finished
Like, employees could do cashless stock option exercise by just going to the Fed’s overnight lending market instead of dealing with boutique lenders
Can someone provide a ELI5 for this?
This was a good and simple explanation on why this might be happening: https://www.youtube.com/watch?v=O0fSPO7AW7k . tl;dw: too much money in the system, big banks don't want the liability, push it to money market funds which use short term treasury while treasury is trying to increase their long term debt and reduce the short term ones. essentially, not as scary as it sounds.
This might be an unpopular opinion, but the economy we have right now feels quite fake, for lack of a better word, in the sense that the official numbers that are reported don't seem to reflect its actual health. I find it deeply concerning that every warning sign is summarily dismissed as "transitory" and the government and the Fed continue to drive full speed ahead.
That's what 0% interest rates are like. Limitless amounts of money as long as the economy has enough confidence to use it.
Earlier quoted context omitted.
That's what 0% interest rates are like. Limitless amounts of money as long as the economy has enough confidence to use it.
Yet I can't get a 0% interest load anywhere. How does this benefit anyone other than large institutions?
This might be an unpopular opinion, but the economy we have right now feels quite fake, for lack of a better word, in the sense that the official numbers that are reported don't seem to reflect its actual health. I find it deeply concerning that every warning sign is summarily dismissed as "transitory" and the government and the Fed continue to drive full speed ahead.
Current headlines use the broad statistics, such as the most exclusive unemployment stats, that don't really capture what's happening on Main Street.
The reporting on the economy barely pokes at issues and are generally just looking for general correlations, such as "Stocks do X as Y does that," or "GDP is doing X while Y is doing Z."
Earlier quoted context omitted.
That's what 0% interest rates are like. Limitless amounts of money as long as the economy has enough confidence to use it.
Yet I can't get a 0% interest load anywhere. How does this benefit anyone other than large institutions?
If you're looking for more information about reverse repos and this action generally, I found this piece incredibly useful: https://fed.tips/sico4-1/ Long but worth the education (if you're interested)
Financial Institutions put collateral into an overnight market and receive cash, and then they "agree" to "repurchase" / give the cash back (plus some fee) for the collateral the next day - right?
This is the "opposite" in that Financial Institutions put cash in and get collateral (treasuries) out - right? The transaction is essentially going in the "reverse" direction it traditionally went - which is why it's the "reverse repo market".
It's interesting because "having too much cash" is not usually a problem. Now it is.
Earlier quoted context omitted.
That's what 0% interest rates are like. Limitless amounts of money as long as the economy has enough confidence to use it.
Yet I can't get a 0% interest load anywhere. How does this benefit anyone other than large institutions?
Also “the system” isn’t setup to be nice to you.
Cefi flash loans It means a healthy economy and tons of deals, if it wasn’t so exclusive the banks wouldn’t have any business but it’s hard to say if it would be bad. I think more and smaller deals would be finished Like, employees could do cashless stock option exercise by just going to the Fed’s overnight lending market instead of dealing with boutique lenders