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What have the banks been doing with the 2% Fed Funds Rate and discount window? Are they just not using it? Doesn't it supposively give them more wiggle room for lending out money at a lower cost? Where would you find this information?
Hahaha.... they are using it to pay off higher interest loans... the U.S. government is stupid... I wish the government would lend me loans at 2% interest... I suspect everyone would own a home, a car, and pay off all their bills... too bad Americans are too stupid to demand the government lend to us instead of corporations...
I suspect everyone would own a home, a car, and pay off all their bills... too bad Americans are too stupid to demand the government lend to us instead of corporations...
And that Americans are stupid enough to help fund and buy stock in these corporations.
Ugh, seriously there is nothing stupid about lowering the fed funds rate. Its how the FED manages monetary policy. Would you prefer them to let the economy collapse into another depression? Or perhaps they should go up and down and sing and hope things get better? This is not to mention that the FED funds rate has nothing to do with the government borrowing money to banks rather its the rate banks loan money to themselves!
The fed loans money via the discount rate which is typically 50+ points higher, right now primary is 2.25%. The loans given via the discount window are usually very short term (Primary was changed to 30 days recently). Also, the banks need need collateral to use the discount window.
Ugh, seriously there is nothing stupid about lowering the fed funds rate. Its how the FED manages monetary policy. Would you prefer them to let the economy collapse into another depression? Or perhaps they should go up and down and sing and hope things get better? This is not to mention that the FED funds rate has nothing to do with the government borrowing money to banks rather its the rate banks loan money to themselves!
The fed loans money via the discount rate which is typically 50+ points higher, right now primary is 2.25%. The loans given via the discount window are usually very short term (Primary was changed to 30 days recently). Also, the banks need need collateral to use the discount window.
Thanks Humanoid.... I have no problem with them having lowered the rates... but I was just curious as to what banks have done in reaction to having lower rates whether from borrowing from each other or borrowing from the Fed.
Even with the lower rate targets, it doesn't seem like the Fed has had any trouble getting the Fed Funds rate down through the open market mechanisms... does this mean that the Fed still has flexibility in lowering the Rates since there are still takers? What are your thoughts on how the rates have effected the availability of credit? And where is this credit going?
Is evilnewbie right? that banks are using the additional credit to pay down/off higher interest loans? or write-downs?
What have the banks been doing with the 2% Fed Funds Rate and discount window? Are they just not using it? Doesn't it supposively give them more wiggle room for lending out money at a lower cost? Where would you find this information?
-chuck22b
The low rate is to benefit THEM borrowing money not you.
Is there any way for the small guy to borrow money cheap nowadays and loan it out for a higher rate? This is America still, ain't it? What laws prevent the little people from forming credit unions to make money like the bankers do?
Thanks Humanoid.... I have no problem with them having lowered the rates...
Yeah, I was referring to the comments below yours.
Quote:
What are your thoughts on how the rates have effected the availability of credit? And where is this credit going?
The lending done throw the discount window is really small fish, its essentially there to prevent a bank from going under due to a short term funding problem. The same can be said of short term interbank borrowing. Anyhow, it doesn't have a big effect on the availability of credit, rather it is helping liquidity. The new term auction facility is also there to increase liquidity (Its available to any institution that can hit the primary discount window).
Ugh, seriously there is nothing stupid about lowering the fed funds rate. Its how the FED manages monetary policy. Would you prefer them to let the economy collapse into another depression? Or perhaps they should go up and down and sing and hope things get better? This is not to mention that the FED funds rate has nothing to do with the government borrowing money to banks rather its the rate banks loan money to themselves!
The fed loans money via the discount rate which is typically 50+ points higher, right now primary is 2.25%. The loans given via the discount window are usually very short term (Primary was changed to 30 days recently). Also, the banks need need collateral to use the discount window.
well actually yes i do think that we need to be plunged into a depression. sooner or later we have to face the music. the longer we hold on the worse the depression will be. we consume and consume like there's no tomorrow. that would be fine if we also produced like there's no tomorrow but we don't.
well actually yes i do think that we need to be plunged into a depression.sooner or later we have to face the music. the longer we hold on the worse the depression will be. we consume and consume like there's no tomorrow. that would be fine if we also produced like there's no tomorrow but we don't.
No you don't. That sounds cute, and tough love-ish, but you don't want to see that. The level of despair, homelessness and such would be to much to see. Not to mention if it ended up happening to you. It sounds really cool to say you want to see a depression but the reality of it is, I don't think any of us are prepared to see what would come along with that.
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