re: #116 Conservative in Liberal Hands

Interesting Rumor - Banks and other Financial Institutions that were “encouraged” to take TARP funds are finding that they must hold on to the TARP funds to keep liquidity. Where are they putting their borrowed funds?

T-Bills! Imagine borrowing at 5 or 6 percent and receiving a measly 1.5 percent in return. Also, since they’re purchasing T-Bills the money really never when anywhere…

T-Bills are paying 1.5%?

The mortgage on my rental home is indexed on the T-Bill and adjusted this year to 3.5%. It is nominally 2.875% + current T-Bill on May 1st (0.6% this year) rounded to nearest 1/8th adjusted every year. That’s right, I have a mortgage at 3.5% right now. I think I’ll try to modify it and lock that rate for the life of the loan.