On Wed, Oct 21, 2009 at 11:38 AM, Louis Proyect <[email protected]> wrote: > What kind of bonds are they buying? Are they investing the money in American > business? “No, they are mostly buying Treasuries.” So the money is just > being shuffled from one Federal bank account to another, with each Wall > Street bank skimming off $1 billion per month for itself? “Pretty much.”
I am still puzzled bu this: if these guys are all simply buying Treasuries, wouldn't that simply push the yields down and eliminate the profit opportunity? In any case, if indeed it is Treasuries they are buying, we are talking about 5 year maturities at least to get 2%: http://www.ustreas.gov/offices/domestic-finance/debt-management/interest-rate/yield.shtml So this is really a bet on interest rates staying really low i.e. < 2% for at least the next five years? Sounds like a *very* risky bet. Somehow, this all doesn't quite make sense. How else could they making money then? Could it be that they are simply cooking the books again? -raghu. -- "Really ?? What a coincidence, I'm shallow too!!" _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
