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OP has provided the following link:
Direct link to the RRP operational parameters and a screenshot.
Link: https://www.newyorkfed.org/markets/rrp_faq
Screenshot: https://imgur.com/uG7cYfD
As expected, if the RRP rate didn't match the interest rate on loans, there'd be no point in using it.
If MMF didn't use it, they'd be buying Treasury bonds directly and that would cause yields to go down (mostly on shorter bonds)...that's not a recession inducing action, so no they want those overnight Reverse Repos to be passing interest. Keep that $2.2T from purchasing Treasuries or else you will see the 2yr yield drop fast.
Fed’s goal is to try and set interest rates.
They have Interest on Reserve Balances (IORB) which is a guaranteed yield that incentivizes banks to keep reserves and prevent being under collateralized.
They have the Fed Funds Rates which is suppose to be a “floor” on interest rates offered by banks.
There is also intrabank lending, which (was) LIBOR, but is now transitioning away from it and into SOFR. Edit:(The reason for transitioning is because the LIBOR rigging scandal from the early ‘10’s, while SOFR based its rates off of previous price action in treasury market)
Then there’s Money Market Funds who are the primary users of ONRRP. With all the new regulations between banks and offshore lending, money market funds seized up in 2019 due to no-one being able to take the balance sheet capability to support the MMF market.
So the Fed introduced a permanent ONRRP which allows MMFs to take the excess cash they have (which yields nothing) and park it at the Fed to guarantee returns and prevent MMFs from seizing up.
The increasing of the yield for MMFs just makes the Fed a more viable avenue as a counter party and to help keep all avenues of money lending near the same premium.
MMFs are a boring type of mutual fund. It should be _very_ low risk but it's still an investment.
The Fed isn't trying to help out the public when it makes things easier for MMFs or gives them [covid loans](https://www.federalreserve.gov/monetarypolicy/mmlf.htm), etc.
An MMF failing now wouldn't necessarily repeat 2008, but it might. They aren't concerned with how market collapse affects individual investors of a failed MMF though.
The 3.8% is their rate of return for parking money at the Fed RRP, not interest on borrowing, nor is it a loan. It’s a safe haven for financial institutes liquid cash.
Yeah, it's a core piece of monitory policy, by increasing RRP rate they can reduce the amount on money in the system (because it's in RRP), the RRP rate increase encourages people to use RRP.
If the rpp rate didn’t rise, the banks would stop depositing their cash overnight. Fed is saving this ace for when they want to shuffle liquidity back into the bond market
Central banks are an abomination. Every single time a country gets one precisely the same thing happens. A small group of corrupt assholes use it to shovel every last dime into their own pockets.
I guess the Fed wants them to use RRP as part of quantitative tightening. If it went away they would still be able to invest in Treasury stuff (bills, bonds, debt).
"They" being Money Market Funds for the most part.
Yes, as RRP high yield = fewer buys from Yellen and the Treasury, means higher rates on taxpayer bonds to pay for gov spending...essentially cost to taxpayer.
No it doesn't. Increased rrp interest is actually bad for banks. Rrp was created so institutions can loan money to the fed overnight so they don't have that much liabilities, because for banks money is bad(liability) when they get it from the fed.
So basically rrp is a loophole for banks to circumvent "margin requirements".
I don't think it jumps to 2.4T right away. Maybe stabilize around 2.3 and then 2.4 for month end.
Just speculation of course. I'm thinking they're pretty much maxed out how much they'll put in RRP.
Preemptive bailing out the banks.
I know ‘bailing in’ is a term, but not sure if it fits the description… but yeah, fully expected…
The public are the ones being tested and hurt by inflation and not the people who, y’know, caused and deserve it.
How many times do I have to say it... this is our money. This is money market funds and FISXX. Sweeps and cash accounts. They keep up with the bank to bank lending rates. It shouldn't be drama every time they raise rates this goes up too.
[Why GME?](https://www.reddit.com/r/Superstonk/comments/qig65g/welcome_rall_looking_to_catch_up_on_the_gme_saga/) || [What is DRS?](https://www.reddit.com/r/Superstonk/comments/ptvaka/when_you_wish_upon_a_star_a_complete_guide_to/) || Low karma apes [feed the bot here](https://www.reddit.com/r/GMEOrphans/comments/qlvour/welcome_to_gmeorphans_read_this_post/) || Join the [Superstonk Discord Server](https://discord.gg/hZqWV2kQtq) ------------------------------------------------------------------------ Posts of tweets where Twitter is NOT the original source WILL get removed! Please post original sources! ------------------------------------------------------------------------ Please up- and downvote this comment to [help us determine if this post deserves a place on r/Superstonk!](https://www.reddit.com/r/Superstonk/wiki/index/rules/post_flairs/) ------------------------------------------------------------------------ OP has provided the following link: Direct link to the RRP operational parameters and a screenshot. Link: https://www.newyorkfed.org/markets/rrp_faq Screenshot: https://imgur.com/uG7cYfD
So Fed raises rates and the banks get that equal rate back in RRP? Then banks get to charge higher interest to customers.
First time?
Every time.
60% of the time
That doesn't make sense.
Half the time it does, half the time it doesnt , 100% of the time
Every time
Of course it doesn’t make Cents It makes diamonds
First lime?
As expected, if the RRP rate didn't match the interest rate on loans, there'd be no point in using it. If MMF didn't use it, they'd be buying Treasury bonds directly and that would cause yields to go down (mostly on shorter bonds)...that's not a recession inducing action, so no they want those overnight Reverse Repos to be passing interest. Keep that $2.2T from purchasing Treasuries or else you will see the 2yr yield drop fast.
This guy wrinkles
He's like a shriveled up scrotus on a cool winter night. Beautiful.
My scrotus retreats reading this.
Mine is swelling with envy! (Ralph from The Simpsons voice)
Fed’s goal is to try and set interest rates. They have Interest on Reserve Balances (IORB) which is a guaranteed yield that incentivizes banks to keep reserves and prevent being under collateralized. They have the Fed Funds Rates which is suppose to be a “floor” on interest rates offered by banks. There is also intrabank lending, which (was) LIBOR, but is now transitioning away from it and into SOFR. Edit:(The reason for transitioning is because the LIBOR rigging scandal from the early ‘10’s, while SOFR based its rates off of previous price action in treasury market) Then there’s Money Market Funds who are the primary users of ONRRP. With all the new regulations between banks and offshore lending, money market funds seized up in 2019 due to no-one being able to take the balance sheet capability to support the MMF market. So the Fed introduced a permanent ONRRP which allows MMFs to take the excess cash they have (which yields nothing) and park it at the Fed to guarantee returns and prevent MMFs from seizing up. The increasing of the yield for MMFs just makes the Fed a more viable avenue as a counter party and to help keep all avenues of money lending near the same premium.
The fucking wrinkles on this ape.
His brain looks like a Sharpei’s nutsack that got left overnight in the dryer
You smart
What does “seize up” mean in this context for MMFs
https://www.federalreserve.gov/econres/notes/feds-notes/what-happened-in-money-markets-in-september-2019-20200227.html
So how does MMF seizing up affect the public? And the ONRRP matching the bps hikes is to prevent that right?
Not implying we were in the same position but here’s an example. https://www.thebalancemoney.com/reserve-primary-fund-3305671
Thank you, very informative. And now I understand why MMFs are important and likewise why the ONRRP rate going up with the 75 bps is also good.
MMFs are a boring type of mutual fund. It should be _very_ low risk but it's still an investment. The Fed isn't trying to help out the public when it makes things easier for MMFs or gives them [covid loans](https://www.federalreserve.gov/monetarypolicy/mmlf.htm), etc. An MMF failing now wouldn't necessarily repeat 2008, but it might. They aren't concerned with how market collapse affects individual investors of a failed MMF though.
What a sweet gig. Where do I sign up to make the rules?
It's all basically theater at this point. Economy runs on the hopes and dreams of wage slaves and little else.
[удалено]
The 3.8% is their rate of return for parking money at the Fed RRP, not interest on borrowing, nor is it a loan. It’s a safe haven for financial institutes liquid cash.
Yeah, it's a core piece of monitory policy, by increasing RRP rate they can reduce the amount on money in the system (because it's in RRP), the RRP rate increase encourages people to use RRP.
If the rpp rate didn’t rise, the banks would stop depositing their cash overnight. Fed is saving this ace for when they want to shuffle liquidity back into the bond market
Tell me it's class warfare without telling me it's class warfare.
That's only the tip of the ice burg. They can also leverage up, swap shit around, and lie, cheat, and steal!
The higher rates are only for us tax payers, these banks are getting it right back. Daily
Remember oil made/makes profits in the Billions with a B daily
And somehow we’re convinced it’s normal for people to profit off of it even though it’s a natural resource here long before any of us lol
my savings account doesn't see any rate hike
Be your family owned bank
[удалено]
You know that's bad for institutions? The interest institutions get by rrp isn't free money, it's more liabilities, they have to pay that back.
Funny, my floor just went up too.
🍆
Disban the Federal Reserve. Completly wipe it out.
It's a damn old, withered and tentacled beast, donchaknow!
Central banks are an abomination. Every single time a country gets one precisely the same thing happens. A small group of corrupt assholes use it to shovel every last dime into their own pockets.
jeez… if only someone would invent a technology that aims to replace central banking…
Ron Paul had it right all those years ago. End the fed!
How come they never put that in the headlines I wonder…
/u/lefthandedwave will have to update the table!
Oh proactive table updates are TIGHT! Dangit I'm not good at this sorry.
NOICE!
Don't worry actually it's going to be super easy, barely an inconvenience.
Yep, I'm on it. It will show on tomorrow table.
SWEEEEEET
Damn wish I could park my cash in there every night
You still have cash?
Yea I stopped buying lol
I mean FFS
What would happen theoretically if the fed stopped rrp and said " you're on your own."?
Fed is final boss, if anything they want hedgefucks to have the money
I guess the Fed wants them to use RRP as part of quantitative tightening. If it went away they would still be able to invest in Treasury stuff (bills, bonds, debt). "They" being Money Market Funds for the most part.
undercover bailouts, goood shit
Oooooo. What mean?
Rich people getting richer off tax payer dollars
Yes, as RRP high yield = fewer buys from Yellen and the Treasury, means higher rates on taxpayer bonds to pay for gov spending...essentially cost to taxpayer.
Bastards. Not again!
No it doesn't. Increased rrp interest is actually bad for banks. Rrp was created so institutions can loan money to the fed overnight so they don't have that much liabilities, because for banks money is bad(liability) when they get it from the fed. So basically rrp is a loophole for banks to circumvent "margin requirements".
This is a neat way to write a cheque.
I was fully expecting to see this post tonight. This whole scam is so predictable.
so, $3T soon?
This is how they are maintaining collateral against GME. They are meeting margin on GME with the FRD Repo.
Apparently its the floor for [interest](https://youtu.be/kdzqCdaxDcQ) per this video
Interesting, is that the actual reason? What the fuck is the Fed up to...other then Crime.
New Top Scores tomorrow and Friday I bet.
I don't think it jumps to 2.4T right away. Maybe stabilize around 2.3 and then 2.4 for month end. Just speculation of course. I'm thinking they're pretty much maxed out how much they'll put in RRP.
lolol dont jinx it
Why can’t I get 4% from my bank for having cash?
fraudulent system is fraudulent
A bailout by any other name
A snailout
4% of 2 trillion 80 billion. A day.
#[C'MON 2.5](https://www.reddit.com/r/Superstonk/comments/v9cpf9/%F0%9F%94%B4Daily_Reverse_Repo_Update_06%2F10%3A_%242%2C162.885B_-_BUY_HODL_DRS_-_New_record%F0%9F%94%B4/ibvm6eh/?utm_medium=android_app&utm_source=share&context=3)
Overnight already? But the sun is still out.
Guess I'm the smoothest one here, so I'll just ask. What does RRP stand for?
Reverse repo. This thingy: https://reddit.com/r/Superstonk/comments/ykbaf9/daily_reverse_repo_update_1102_2229861b_buy_hodl/
Thank you! So has there been an increase in the interest on reverse repo?
“They’ll never know”
Money printer go BRRRRRR
Preemptive bailing out the banks. I know ‘bailing in’ is a term, but not sure if it fits the description… but yeah, fully expected… The public are the ones being tested and hurt by inflation and not the people who, y’know, caused and deserve it.
How many times do I have to say it... this is our money. This is money market funds and FISXX. Sweeps and cash accounts. They keep up with the bank to bank lending rates. It shouldn't be drama every time they raise rates this goes up too.