In Plus episode 449, we answer a member's question about retaining an investment advisor. We compare bank-offered money market accounts and money market mutual funds. We review what repurchase agreements are and discuss at what point the Federal Reserve will need to stop allowing its bond holdings to mature as part of quantitative easing. … [Read more...]
270: Repo Rates Soared—Here’s Why It Matters
How a liquidity crunch in the short-term lending markets sent interest rates soaring. Why this is a huge blunder on the part of the Federal Reserve, and what it means for us as individual investors. In this episode you’ll learn: What are repurchase agreements and how are they used to finance U.S Treasuries. How outflows from money market funds and hoarding by banks led to a liquidity crunch that caused repo rates to spike to 10%. Why banks are hoarding reserves held at the … [Read more...]
220: Where Should You Invest Your Cash Savings?
How to evaluate cash savings options at banks, credit unions and brokerage firms. Why are yields on cash savings so much higher than a few years ago. How to tell if your bank or credit union is in experiencing financial difficulties. Photo by Brook Ward In this episode you’ll learn: How to tell if a bank or credit union is having financial difficulties.Why are yields on short-term cash equivalents higher.What tools does the Federal Reserve have to keep short-term … [Read more...]
MNY029 Plus: Quantitative Easing
In this week's Money For the Rest of Us Plus episode, I discuss: Quantitative easing as it pertains to repurchase agreement collateral and its impact on interest rates. Will the Federal Reserve sell its holdings of bonds? The Fed's reverse repo program. Nassim Nicholas Taleb's precautionary principle as it applies to QE and GMOs. Karl Popper's concept of the piecemeal engineer. Feedback from listeners on the interlude music experiment. The episode length is 17 minutes. … [Read more...]
