jpkoning
Joined 6 years ago
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May 24
I write at the Moneyness blog | jpkoning.blogspot.com
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Comment · 1 year ago
The Fed still does purchases and sales, but not for the purpose of driving the overnight interest rates towards its target. The level of the overnight rate is not affected of any purchases or sales that the Fed does.
Comment · 1 year ago
"What happens next is that they buy and sell government bonds in the open market."
This describes how central banks operated in the U.S. before 2008 and in Canada before the 1990s. The Federal Reserve and the Bank of Canada both set a target for the overnight interest rate, and then they hit that target by doing open market purchases (or sales) of bonds, effectively adding funds to (or draining funds away from) the overnight lending market. By changing the quantity of funds, they influenced the interest rate.
What changed is that both central banks introduced interest payments on balances that banks hold at the central bank. Previously, these balances earned 0%. With this new tool, they could directly set the overnight interest rate by adjusting the rate paid on these reserves, eliminating the need for regular open market operations.
Comment · 4 years ago
The Grit Daily article cited in the linked-to tweet is fake news. It alleges that PayPal's proposed misinformation clause and associated $2500 penalty, which was cancelled by PayPal earlier this month, has been quietly "added back into the terms of service with equally ambiguous language."
This can be proven wrong with a quick check of PayPal's acceptable use policy in the WayBack Machine. The $2500 fine that the article alleges has been added back after "criticism on social media died down" has been there since 2021. [https://web.archive.org/web/20211013092233/https://www.paypa...]
As for article's allegation that a prohibition on intolerance has just been added this October, that clause been there since 2018. [https://web.archive.org/web/20181108164503/https://www.paypa...].
So there is no justification to the article's allegation that the clauses have been quietly added back to PayPal acceptable use policy.
Furthermore, in building its argument that the misinformation clause was sneakily "added back into the terms of service," the article erroneously makes the assumption that a prohibition on intolerance equates to a prohibition on misinformation. This doesn't follow.
I'm not trying to support PayPal's acceptable use policy. But if you're going to attack it, at least use facts.