3 ms·
There's no free lunch. A quick check of the markets and where short-term treasuries are trading can tell you that 3% is too good to be true.... Glad it broke qu
by anonu 8y ago
There's no free lunch. A quick check of the markets and where short-term treasuries are trading can tell you that 3% is too good to be true.... Glad it broke quickly rather than deluding people into thinking their money was safe and getting a good return.
High Reward =~ High Risk...
If you can call 3% high...
- spullara 8y agoYou can buy CDs from Ally Bank that give you 3.1% with only a 90 day interest penalty for early withdrawal. Not too far off what they were offering assuming that you aren't using it as your main checking account.
- pishpash 8y agoUh, 90 day penalty is a 25% per annum haircut on day 364 => 2.325% and even lower on any day before. Saying that's "not too far off" is the financial illiteracy that upthread is talking about.
- klenwell 8y agoInterestingly, 3% was the magic number that helped break the global economy in 2008 according to Planet Money: https://www.thisamericanlife.org/355/the-giant-pool-of-money https://www.thisamericanlife.org/355/the-giant-pool-of-money In short, finance professionals looking for reliable 3% annual returns could no longer count on US treasuries to help get them there so they turned to securitized mortgages.