Post by unlawflcombatnt on Aug 9, 2007 14:36:18 GMT -6
Today the Fed took its first step to bail out the Housing Industry and the Banking Industry, in order to save housing speculators, investment banks, and hedge funds from the consequences of their own greed and stupidity.
Fed Adds $24 Bln in Temporary Funds as Demand Rises
By Ye Xie
"Aug. 9 (Bloomberg) -- The Federal Reserve added $24 billion in temporary reserves to the banking system amid an increase in demand for cash from banks roiled by U.S. subprime loan losses.
Federal funds, the U.S. overnight interbank lending rate, traded at 5.5 percent, above the Fed's target rate of 5.25 percent....
The European Central Bank today loaned 94.8 billion euros ($130.2 billion) to meet banks' cash needs. The ECB said it will provide unlimited funds today at 4 percent, its current benchmark rate, after demand for cash in the European money markets drove interest rates higher. The Bank of Canada today said it will provide liquidity to ``support stability.''...
`Tremendous Anxiety'
``The Treasury Department continues to monitor markets and remains vigilant,'' Jennifer Zuccarelli, a spokeswoman in Washington, said in an interview.
The Fed split the additions into $12 billion in 14-day repurchase agreements and the same amount in overnight repos.
Wrightson, an ICAP research unit specializing in U.S. government finance, had expected the Fed to add a total of $15 billion today. The Fed usually arranges 14-day repos every Thursday in addition to its daily operation....
``There is tremendous anxiety over what happens in the markets, especially the money market.''
Fed funds' weighted average was 5.27 percent yesterday, after trading between 5 3/16 percent and 5 3/8 percent, according to the central bank.
Repos...
The Fed added more than they needed ``to calm the market down,'' Carey said. ``They put liquidity in more than needed because they want the rate back to 5 1/4 percent.''
In repos, the Fed buys U.S. Treasury, mortgage-backed and so-called agency debt from its 21 primary dealers for a set period, temporarily raising the amount of money available in the banking system. At maturity, the securities are returned to the dealers and the cash to the Fed.
Repos help maintain enough money in the system to keep overnight interest rates close to the central bank's target. They don't signal a policy change...."
The Fed has now stepped in to bail out the banks.
Also interesting is that they are buying back Mortgage Backed Securities. Thus, the Housing Bubble Bailout has also begun.
Fed Adds $24 Bln in Temporary Funds as Demand Rises
By Ye Xie
"Aug. 9 (Bloomberg) -- The Federal Reserve added $24 billion in temporary reserves to the banking system amid an increase in demand for cash from banks roiled by U.S. subprime loan losses.
Federal funds, the U.S. overnight interbank lending rate, traded at 5.5 percent, above the Fed's target rate of 5.25 percent....
The European Central Bank today loaned 94.8 billion euros ($130.2 billion) to meet banks' cash needs. The ECB said it will provide unlimited funds today at 4 percent, its current benchmark rate, after demand for cash in the European money markets drove interest rates higher. The Bank of Canada today said it will provide liquidity to ``support stability.''...
`Tremendous Anxiety'
``The Treasury Department continues to monitor markets and remains vigilant,'' Jennifer Zuccarelli, a spokeswoman in Washington, said in an interview.
The Fed split the additions into $12 billion in 14-day repurchase agreements and the same amount in overnight repos.
Wrightson, an ICAP research unit specializing in U.S. government finance, had expected the Fed to add a total of $15 billion today. The Fed usually arranges 14-day repos every Thursday in addition to its daily operation....
``There is tremendous anxiety over what happens in the markets, especially the money market.''
Fed funds' weighted average was 5.27 percent yesterday, after trading between 5 3/16 percent and 5 3/8 percent, according to the central bank.
Repos...
The Fed added more than they needed ``to calm the market down,'' Carey said. ``They put liquidity in more than needed because they want the rate back to 5 1/4 percent.''
In repos, the Fed buys U.S. Treasury, mortgage-backed and so-called agency debt from its 21 primary dealers for a set period, temporarily raising the amount of money available in the banking system. At maturity, the securities are returned to the dealers and the cash to the Fed.
Repos help maintain enough money in the system to keep overnight interest rates close to the central bank's target. They don't signal a policy change...."
The Fed has now stepped in to bail out the banks.
Also interesting is that they are buying back Mortgage Backed Securities. Thus, the Housing Bubble Bailout has also begun.