No. of Recommendations: 2
Perhaps they called an emergency meeting. ("Emergency! We're getting flooded with millions of dollars!") :)

I think Pen Fed is very interesting from a supply and demand perspective that actually sheds light on the liquidity crisis and supports my theory that the finance industry should have its margins squeezed to the bone, which is why the hedgies and big investment banks, trying to get huge gains that make no sense in the market, become loan sharks.

I think my local CU, for a big university, has a reasonable mix of borrowers and savers, and manages to keep most of its members savings at home by offering top tier, but not fire sale, CD rates.

I think Pen Fed does not have enough savers among its legitimate members (armed forces, Pentagon employees, vets who joined while in the service). So they have actively sought people like us to get enough savings to provide loans to their legitimate members. I don't think they have a choice. However, those of us who only use Pen Fed to get fire sale rates won't put money into Pen Fed except when they have rates above, preferably well above, what we can get elsewhere. I would think their committee of rate deciders has a very tough job. They need to attract enough money to cover their loans. They need the money to come in with cash flow to cover their loans, otherwise they are sitting on January money on which they are earning short term treasury rates (probably), which going to be significantly lower than what they are paying in interest, and they still need to offer loans at attractive rates compared to banks, which should be easy for a big credit union with good cash flow, since they don't have to worry about profit ((just staying even) and paying huge executive salaries.
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