Central Banks Working Together to Avert Crash
August 11th, 2007Look at the back of a $1 bill. See the glimmering eye above the pyramid? It’s glimmering a bit brighter right now.
Via: Bloomberg:
Central banks in the U.S., Europe, Japan, Australia and Canada added about $136 billion to the banking system in an attempt to avert a crisis of confidence in global credit markets.
The Federal Reserve, in a second day of action in concert with the European Central Bank, provided $38 billion of reserves and pledged more “as necessary,” in a statement unprecedented since after the Sept. 11, 2001, attacks.
Money market rates rose worldwide the past two days on evidence the subprime crisis is spreading after global investors piled into U.S. securities backed by mortgages. By the end of the day, the central bank actions helped spark a turnaround in American stocks and drive the U.S. overnight bank lending rate below the Fed’s target.
“They accomplished their short-term mission to make sure the market stabilized ahead of the weekend,” said David Resler, chief economist in New York at Nomura Securities International Inc. “It remains to be seen how much more they’ll have to do.”
The U.S. federal funds rate opened at 6 percent, a six-year high. It sank as low as 1 percent in late trading, according to ICAP Plc, after the New York Fed staged three repurchase operations, buying assets including mortgage-backed securities. The total of $38 billion, following $24 billion yesterday, was the highest amount of temporary funds since Sept. 12, 2001.
`Unlimited’ Ability
“The Fed has almost unlimited ability to supply liquidity if they feel that is appropriate,” said Alice Rivlin, a former Fed vice chairman who’s now at the Brookings Institution in Washington.
Send lawyers,guns and money! The shit has hit the fan!
@R.L. – not yet! There’s still a good while of acting shocked and blaming the situation on terrists and mexicans. *YaWn*
It’ll be fun to see who is sacrificed and who gets away clean. Any bets?
The unlimited supply is just that, unlimited. This show doesn’t end until ‘they’ say it does. They could prop this up for as long as they please. Their level of technical control is stupendous as is their ability to conjure and manipulate.
“when the shit hits the fan!”, they will have turned on the fan and hired help to throw the shit.