Fed Makes Biggest Temporary Injection Since '01 (Into U.S. Banking System)

[Purveyor]

Source: Reuters

NEW YORK (Reuters) - The Federal Reserve on Thursday pumped its biggest temporary daily infusion into the U.S. banking system since just after the September 11, 2001 attacks as short-term lending rates rose on both sides of the Atlantic.

Even though some news about bank write-downs from riskier investments was not as dismal as some investors had feared, underlying strains pushed overnight lending rates up in both the United States and Europe.

"There was a bit more focus on the Fed operations today in context of the rise in Libor (London Interbank Offered Rates)," said Tony Crescenzi, chief bond market strategist at Miller, Tabak & Co. in New York.

--
The Fed injected $47.25 billion in temporary reserves, its biggest combined daily infusion since September 19, 2001, to calm a rise in overnight interbank lending rates.

"We are seeing tightness in fed funds with concerns about financial institutions' exposure to subprime," said Kenneth Kim, economist with Stone & McCarthy Research Associates, in Princeton, New Jersey.



Read more: http://investing.reuters.co.uk/news/articleinvesting.aspx?type=tnBusinessNews&storyID=2007-11-15T183316Z_01_L0558347_RTRIDST_0_BUSINESS-ECONOMY-CREDIT-DC.XML

[OrangeCountyDemocrat]

1. Nothing To See Here, Move Along

No big deal, don't be too concerned. This happens every now and then.

:sarcasm:

[saigon68]

36. Yes, move along

That hum you hear are millions of Benjamins being printed as we speak.

PS they will be good even after the ink is dry

</sarcasm.

[groovedaddy]

2. It's not looking good folks - better stock up!

How long will this house of cards hold up?

[MaineDem]

3. Stock up on what?

Can't afford groceries.

[benld74]

4. EUROS

[shain from kane]

6. Top Ramen Noodles. n/t

[olddad56]

13. better get a shopping cart now, because by the time you are homeless, there won't be any left.

[ORDagnabbit]

5. learn more by watching this vid

www.moneyasdebt.net

[Supersedeas]

7. propping up the ecomony of little lord pissypants

[olddad56]

14. I don't think it is about propping up the economy....

I think it is designed to inflate the economy. Bush's illegal invasions and subsequent illegal occupations have been financed by foreign debt. I think the plan is to pay that debt off in dollars that are increasing worth less and less.

The wealthy are already out of dollars, the middle class will learn what it is like to be poor, the poor will learn what it is like to starve.

As Toby Keith would say "Brought to you, by the Red White and Blue".

[dantyrant]

18. And provide liquidity for a financial system that's seizing up

under a trilion dollars in potentially bad debt instruments.

It's certainly not propping up the economy... if anything, it's life support. But it's highly inflationary, so it'll ultimately come at the cost of additional downward pressure on the dollar.

[amandabeech]

28. You've summed it up nicely.

I don't think that any of the big banks and brokerage houses want to be the first to test the market on the price of the mortgage-backed securities. So many of them are carried on the books at a price that's based on an equation done by the same types of folks that guessed wrong on LTCM.

I just wonder how much of that stuff is held by the Chinese and others who aren't exactly our friends.

[ClintonTyree]

8. The Treasury can't print money fast enough......

for Bush to spend it on immoral, illegal wars. Let's see....if they print a few billion dollars MORE then there could be another round of tax cuts for the rich. Then that will "trickle down" and jump-start the economy, right? :sarcasm:

[formercia]

9. They don't even have to print it.

Some gomer on a terminal rolls the dice to see how many zeros to put after a randomly selected number.

[endarkenment]

10. yikers. nt.

[sarcasmo]

11. The Shell game continues. The collapse has arrived in Michigan.

7.7 percent unemployment highest in the nation. Thanks!, Bush crime family.

[Roland99]

12. And DJIA is still down 172 at this point.

[dantyrant]

15. I was just about to post the same...

Whenever they've injected liquidity in the past, the markets soared as that money was put into the markets. We're seeing something else here... where IS that money going?

[Roland99]

21. Central Bankers' pockets??

NAAAAAAAAAHHHHHHH!!!!!!!!!


;)

[dantyrant]

23. Maybe they just made a big pile of it....

and are rolling around in it right now. Or having a money fight, à la Mr. Burns and Smithers. :)

[Javaman]

16. Define "temporary". nt

[Yavapai]

17. Just like the Nixon days.

They turned on the old printing press to pay for Viet Nam. Then Carter took office during the inevitable inflation and took all the heat for it.


"History teaches us that man learns nothing from history"

Georg Wilhelm Friedrich Hegel

[Ghost Dog]

22. Nice one.

:hi: and welcome.

[dysfunctional press]

34. i think that this has A LOT to do with why gore has shied away from running.

whoever the dem that gets elected next year is- it's going to a one-term presidency...and that term is going to be HELL, as far as facing the press is concerned...they'll be relentlessly vicious.

[katty]

19. keep injecting those pink & yellow monopoly doll$rs!!!

[rcsl1998]

20. Just Propping Up Their House of Cards... nt

[HCE SuiGeneris]

24. Brother, help a banker out will ya?

Can ya spare 46 Billion for a cup 'o bullshit. Gladly pay ya back Tuesday of January 2009.

[CGowen]

25. What a headline ....... what is with the 41 billion on Nov 1st?

Fed injects $41 billion into US financial system
The Associated Press
Published: November 1, 2007


WASHINGTON: The Federal Reserve pumped $41 billion (€28.4 billion) into the U.S. financial system Thursday, the largest cash infusion since September 2001, to help companies get through a credit crunch.

The action comes one day after Fed Chairman Ben Bernanke and all but one of his central bank colleagues voted to slice a key interest rate for the second time in six weeks to protect the economy from the ill effects of collapse in the housing market, aggravated by the credit troubles.

The cash injection also came as Wall Street took a nosedive Thursday. The Dow Jones industrials were down more than 250 points in afternoon trading.

The Fed on Wednesday ordered its key rate, called the federal funds rate, to be lowered by one-quarter percentage point to 4.50 percent. That followed up on a bolder, half-percentage point cut in September. Those two rate reductions might be sufficient to help the economy make its way safely through trouble spots, Fed policymakers indicated.

http://www.iht.com/articles/ap/2007/11/01/business/NA-FIN-US-Fed-Markets.php?WT.mc_id=rssbusiness

[Purveyor]

32. Yep, only two weeks ago that injection held the 'largest since 9-11' title.

Seems as though each new injection is larger than the first.

[CGowen]

33. I think it's misleading ,they don't even mention it. n/t

[Demeter]

26. This Economic Crisis Wasn't Brought On By the Common People

This is a genuine, certified, Ivy-league produced crisis. People from prestigious schools and monied pedigrees decided they didn't have enough, so they committed massive immoral and illegal acts of fraud and theft.

I think it's time the top schools in the nation started testing their faculty and staff for integrity, investigated them for crimes, booted out the bad eggs, and then selected their student body on the basis of mental sanity and ethical integrity. Either that, or see their degrees become totally worthless pieces of paper.

There should be a Wall of Shame upon which the crooks AND their alma maters are recorded, to let the public know just where the troubles originate.

[donkeyotay]

27. Notice how tee vee has started to speak of "we" as in

"We have to pay now for the party" or "We didn't know or couldn't see this coming." "We have to tighten our belts." Well, most of "we" didn't benefit, while the bankers and campaign contributers raked in billions. Everyone in power knew it was a crime in progress. It's why regulation of bankers and Wall Street was established in the first place. One set of folks will benefit from Washington not being able to foresee another Katrina coming, and another set will pay.

[katty]

29. guess the Fed EDS had to finally pull out the stun gun & get busy

[applegrove]

30. See. When there is market failure it is up to the government to step in with money.

Works for healthcare, education, infrastructure, employment, anti-poverty legislation and environmental issues too.

[dantyrant]

31. This isn't a market failure.

This is fraud and possibly criminal conspiracy. Ratings agencies owned by banks assigning favorable AAA ratings to MBSs and SIVs that were risky, and now the value of those securities might be zero. The banks are holding onto the securities with the hope of repricing them and luring investors to buy them, tossing them into the $100B superfund. It's buying time at best.

[HuffleClaw]

35. paying yer mastercard with yer visa ?

this crap is not gonna last.