The Sweep — Summary

A checking account paying nothing in a year when short rates pay meaningfully more is a spread, never treated as one because it looks like a service. The industry’s term is candid: sticky deposits, balances valued precisely for not moving. Stickiness was never loyalty, only the cost of watching rates and moving money, real when paid in hours. The instrument pays it in nothing, sweeping idle cash continuously, and the spread closes at the pace of enrollment, pure gain to the household.

The finding is who loses it. Community and regional banks fund disproportionately from sticky retail deposits, and in thin counties they are frequently the last institution holding local knowledge and a balance sheet with the county’s name on it. The collision, both halves true at once: household deposit optimization at scale removes the funding base of the last serving units standing in thin counties. The household owes no one a deposit margin as a civic act, and the county is not wrong that the closing branch was underwriting the diner and the one banker who knew which farms flood.

The speed term turns the pricing into a warning. Sticky deposits were the system’s shock absorber, measured in months; swept deposits move at software speed, together, per the disagreement essay’s convergence, and the recent record already holds the preview of an institution unwound in days at phone speed. An optimized base is that episode as a standing condition. Dated to end-2031 with its miss condition stated. Decision rule: price the sweep’s arrival into any stickiness-valued franchise, and treat the thin-county bank’s funding as a serving unit’s life support wired through an arbitrage.