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To: WalterWhite who wrote (46827)	8/10/2007 11:17:06 AM
From: siempre33	Respond to of 78426

The Fed, just today, has pumped $35 billion into the mortgage-backed bonds market....these are referred to as Repos... newyorkfed.org Repurchase agreements To smooth temporary or cyclical changes in the monetary supply, the desk engages in repurchase agreements (repos) with its primary dealers. Repos are essentially secured, short-term lending by the Fed. On the day of the transaction, the Fed deposits money in a primary dealer’s reserve account, and receives the promised securities as collateral. When the transaction matures, the process unwinds: the Fed returns the collateral and charges the primary dealer’s reserve account for the principal and accrued interest. The term of the repo (the time between settlement and maturity) can vary from 1 day (called an overnight repo) to 65 days, though the Fed will most commonly conduct overnight and 14-day repos.