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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Kailash who wrote (54309)	4/1/1999 9:32:00 PM
From: accountclosed	Respond to of 132070

Definitely there are permanent reserves added. Unfortunately this page biz.yahoo.com only goes back like a week. Often there are permanent reserves added when the Fed permanently buys treasury securities. Also if you add 4 bln per our example everyday and never stop renewing the overnight repo, you are adding 4 bln permanently. I still want to emphasize that the only point I was making is that people seem to think when an overnight adds reserves and they did it yesterday, it seems like people are reacting like it's cumulative. If 4 bln overnight was added every day for a year, I would agree with you that essentially 4 billion has been added permanently...but not that 4 bln x 365 has been added. But repo stands for repurchase agreement. They are definitely temporary. As you point out, a whole series of temporary borrowings has the same effect as a permanent borrowing.