Monday, September 29, 2008

Fed Pumps ANOTHER $630 Billion Into Money Markets

The Fed doubled its swap lines with foreign central banks by $330 billion to $620 billion. The US central bank also tripled the size of the Term Auction Facility (28 day loans) from $150 billion to $450 billion. To quote an old friend named Scooby Doo: "ZOINKS!" Clearly the inevitability of the passage of the bailout bill has done nothing to ease the strains in the money markets. Banks are terrified to lend to each other, understandbly since the possibility of another banking failure increases by the minute. The question remains: If the Fed had to inject an additional $630 billion into the money market TODAY alone with little result, what makes anyone think that a $700 billion bailout bill that won't go into effect for weeks will help asuage the panic in the market? I don't know about you, but I'm staying in my bunker with some canned goods. Somebody let me know when it's safe to come out.

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