Banks borrow record $420 billion per day from Fed

[UpInArms]

Source: Reuters

LONDON/NEW YORK (Reuters) - U.S. banks borrowed a record $420 billion per day from the Federal Reserve in recent days as financial institutions continued to rely on the lender of last resort amid the most severe financial crisis in generations worsened.

The latest Federal Reserve data for the week ended October 8, and published on Thursday, landed the same day overnight interbank borrowing costs fell in the wake of deep rate cuts from global central banks this week to thaw credit markets, but longer-term funding costs stayed stubbornly high.

Banks' discount window borrowings beat the previous record daily average of $367.8 billion they borrowed the previous week. The latest daily borrowings of $420.2 billion were greater than the size of the economy of Belgium.

<snip>

"We're not seeing any relief in term Libor fixings, which tells us that the rate cut has exclusively impacted on the overnight market, but it hasn't touched the Libor market at all," said BNP Paribas rate strategist Alessandro Tentori.

"And that's not a very good sign," he added.

Read more: http://www.reuters.com/article/ousiv/idUSTRE4989GL20081010?sp=true

[thunder rising]

1. Introducing the FED, for those really big payday loans. When a mere mill won't do the FED has bucks

for you.

[Newsjock]

2. $2.1 trillion a week

Of our money.

Soon enough, you're starting to talk about real money there.

[razors edge]

5. But it isn't our money.

The Fed just tells the treasury to issue it in the Fed's name, then they start charging interest.

Great gig if you can get it, they put nothing out of their pocket to back the issue of their fantasy currency other than a promise to extract it back from the American tax payer in the future.

Did I mention with interest?

[htuttle]

3. There's that "Giant Sucking Sound" again...

I think I'm getting preemptively hungry...

[mcollier]

4. Wonder what this money is going ?

thats $2 trillion dollars a week... Hello? Anybody out there? No Police to call

Tomorrow the bottom falls wall street will turn into a melting wax street...

[Purveyor]

6. It is going to take many, many years before we see the DJIA at the level it was

a year ago today (14k+).

The lavish spending days are over for those that have watched their 401k reduced to at least half of their a year ago value.

[WCGreen]

7. 101k....

[Amonester]

8. H Y P E R I N F L A T I O N looms

watch out

[provis99]

9. yep

meanwhile the central bankers think lowering interest rates a percentage will solve the problem. Time we consigned Friedman-style monetarism to the dustbin of history along with supply-side trickle down economics.

[sarcasmo]

10. This tells me that the situation is much worse than any of us realize.

[undergroundpanther]

11. we are being robbed

And no one on the hill has the courage to tell these greedy healthy banks NO.