>>20045272 (lb)
Show me agin how you don't unnerstand what a Reverse Repurchase Agreement with the Fed is?
Once again. A "Significant Financial Institution"* has cash on its books, in excess of that required for its day to day business. Rather than allow that institution to make frivolous loans and credit new credit, the Fed offers the firm an opportunity to purchase securities, currently held by the Fed, and an overnight auction rate, or guaranteed repurchase. This, by its function, removes cash from the financial institution and places it with the FED, in exchange for that overnight interest, risk free. The Fed does NOTHING with that cash, other than sit on it, until the next day.
This is to COUNTER excessive QE in days past. Mopping up excess liquidity in the system. The HIGHER the ReverseRepo activity, the MOAR excess liquidity was in the system. Lower balances in this account means a healthier, AND LEANER financial system, less prone to excessive leverage, and higher interest rate risk.
The FED BUYS NOTHING in this exchange, except CASH.
Sheesh.Financial shills cloud this normal Fed operational tool, all the time, because it's mildly complicated, and serves other traders' interests to BE confusing. So they can take advantage of someone else's mistake.
Dis traderfag out of the biz and no longer care to screw over da stoopid..
*legal term used by Fed, Dept. Of Treasury, SEC, CFTC, & Comptroller of the Currency