Tuesday, August 07, 2007
So You Want A Conspiracy Theory
Recently, the volatility in the markets has again prompted copious amounts of discussion concerning the Plunge Protection Team.
While I do not subscribe to that brand of crazy, I have spent some time watching the Term Investment Option from the U.S. Treasury. This plan allows the U.S. Treasury to invest their excess cash balances by auctioning the cash through competitive bidding for a fixed rate and term.
In essence, almost everyday, the U.S. Treasury makes available to borrow billions of dollars. As the billions are typically paid back within 3 - 12 days, it makes me wonder what an investment bank might be able to do with a $20 billion cash infusion, especially on days when the shorts have hammered their stocks to the ground.
Here is the background information on the program.
And here is a link to recent auctions. This shows the dollar amount that is being loaned out, and the rate paid.
Anyway, something for you conspiracy theorists to churn about.
Aside- I see MVIS is trading up today. Looks like I'll get to stick around and indulge my power trip for another day or so.
While I do not subscribe to that brand of crazy, I have spent some time watching the Term Investment Option from the U.S. Treasury. This plan allows the U.S. Treasury to invest their excess cash balances by auctioning the cash through competitive bidding for a fixed rate and term.
In essence, almost everyday, the U.S. Treasury makes available to borrow billions of dollars. As the billions are typically paid back within 3 - 12 days, it makes me wonder what an investment bank might be able to do with a $20 billion cash infusion, especially on days when the shorts have hammered their stocks to the ground.
Here is the background information on the program.
And here is a link to recent auctions. This shows the dollar amount that is being loaned out, and the rate paid.
Anyway, something for you conspiracy theorists to churn about.
Aside- I see MVIS is trading up today. Looks like I'll get to stick around and indulge my power trip for another day or so.
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