[groanup]

Now, tell me again about how we all had access to 1% money.

What do you think the institutions that had access to 1% money did with it? Loan it to credit card customers at 20%?

The 1% money lasted, what, about six months? And almost every transaction involving 1% money was an overnight transaction. So if a bank borrowed at 1% it almost always had to pay that loan back the next day.

I have seen zero% money in the repo market. But that is a stress condition when the street is short some particular bond issue and can't borrow enough of it.

Again, if you can get yourself a charter, build a capital base of about ten billion, stand up and bid when China wants to sell a few billion bonds and withstand the intense scrutiny and balance sheet rules of the regulators then, you too can be a money center bank. Until then your accusations of preferential status are flimsy.

[AndyJackson]

Until then your accusations of preferential status are flimsy.

Now we are arguing over the meaning of words again. We have had two admissions from you. That banks can get money at the federal funds rate, and that I cannot. Furthermore, I am not likely qualified to have money at these rates, ever.

From the dictionary, preferential means : Manifesting or originating from partiality or preference: e.g. preferential tariff rates; disposed to favor one over another.

I think that fits to a "t."

if a bank borrowed at 1% it almost always had to pay that loan back the next day.

Actually, according to the fed, the term is overnight, but these are automatically renewed until canceled.

But what exactly are we arguing about? You are concerned about whether banks get favorable treatment.

Me I am concerned that the Fed inflates the money supply which leads to economic distortions and malinvestment.

[AndyJackson]

I have seen zero% money in the repo market. But that is a stress condition when the street is short some particular bond issue and can't borrow enough of it.

And when any of my friends here get ourselves in over our heads a little short on our grocery bills the fed will give us 0% money to see us through our stress when we can't borrow enough?

Why was the "street" short some particular bond issue in the first place? Were they planing on a. making money or b. losing money. When the fed gives them 0% money does this a. increase their losses or b. decrease their losses.

Me, I just want to know from the experts.

[Toddsterpatriot]

I have seen zero% money in the repo market.

I could tell him about negative rates in stock loan, but he'd start whining about the Fed transferring wealth. LOL!