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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: pogohere who wrote (101025)8/19/2009 7:53:17 PM
From: Real Man  Read Replies (1) of 116555
 
No, the Fed paid Fed funds minus something,
I forgot, but above market rates (T-bill),
so banks naturally piled up. As rates
dropped to ZIRP the piling stopped.
In other words, rates at the Fed were
higher than market risk free rates.

The Fed screwed up. The effect was major
tightening in the midst of a financial crisis.
Naturally, the markets crashed.
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