March 10th: $50 B at 2.8% http://www.federalreserve.gov/newsevents/press/monetary/20080311b.htm Feb 28th: $30 B at 3.05% http://www.federalreserve.gov/newsevents/press/monetary/20080226a.htm It's free money. How can I start a bank?
http://www.forbes.com/markets/feeds/afx/2008/03/11/afx4757749.html Fed auctions portion of 50 bln usd March TAF at 2.8 pct, below fed funds rate WASHINGTON (Thomson Financial) - The Federal Reserve said it successfully auctioned off 50 bln usd to banks yesterday under its new Term Auction Facility and for the first time auctioned off funds at an interest rate below 3.0 pct. The Fed said the lowest interest rate accepted at the auction was 2.8 pct, well below the current federal funds rate of 3.0 pct. The Fed has used its new TAF auction system since December to deliver funds to banks in need of liquidity, and generally has offered these funds at a rate that is somewhere between the fed funds rate and the higher discount window rate, which now stands at 3.5 pct. In late January, the Fed auctioned some of its TAF funds at a rate lower than the fed funds rate, just before before the Fed lowered the target rate by a half-percentage point. Regardless of whether today's announcement is a firm signal of another pending cut, many economists already expect the Fed to lower the fed funds rate again when it meets next week. The Fed last week announced it would expand the TAF to 100 bln usd per month, up from the 60 bln usd per month auctioned in January and February. The next March TAF auction, again for 50 bln usd, will be held on March 24. pete.kasperowicz@thomson.com pik/wash/ms1 COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
Has anyone read up on this stuff? Reserve Bankâs discount window telephone hotline identifying clearly his/her/their name(s), the name of the institution on whose behalf (s)he/they is/are calling, his/her/their contact phone number and the complete Bid information. "Yo Ben, your phone's been busy all day man. This is The Kin over at ET. I'm gonna need a couple billion because I'm in a bit of a credit crunch. Please wire directly to my bank account ASAP." Seriously, is that all that's needed to create money out of this air. It's only a matter of time before someone scams the Fed and ways away with a few billion dollars. "Reserve Bankâs discount window telephone hotline voicemail" Anyone got the number? 1-800-BERNANKE
Banks borrow at 2.8-3.05% invest in T-Bonds (10 year yielding 3.50%), and you get 0.5% risk free without investing your own money.
I dunno. It's a swap so it really doesn't matter what they trade at. Every 28 days you get to swap subprime slime at book value for new crisp T-Bill at market value. Zero risk... which is the whole point.