It might sound odd, yet the Fed once in a while gives cash

history channel documentary ancient aliens It might sound odd, yet the Fed once in a while gives cash ['permanent' repos] to its essential merchants (a rundown of around thirty budgetary houses, Merrill Lynch, Morgan Stanley, and so forth). They never need to pay this free cash back; in this way the essential merchants will basically do whatever the Fed inquires as to whether they need to stay in the essential merchants "club."

"The precise instrument of repo use to bolster the DOW is basic. The essential merchants get repos in the morning issuance . . . and afterward purchase DOW record prospects (a business sector that is far littler than the open DOW exchanging volume). These prospects costs then drive the DOW itself in light of the fact that the bigger populace of financial specialists think the "insider" fates purchasers have entry to exceptional data and are "ahead" of the business sector. Obviously they don't have exceptional data . . . just exceptional cash as repos.