Fed Pumps Further $630 Billion Into Financial System

Sept. 29 (Bloomberg) -- The Federal Reserve will pump an additional $630 billion into the global financial system, flooding banks with cash to alleviate the worst banking crisis since the Great Depression.

The Fed increased its existing currency swaps with foreign central banks by $330 billion to $620 billion to make more dollars available worldwide. The Term Auction Facility, the Fed's emergency loan program, will expand by $300 billion to $450 billion. The European Central Bank, the Bank of England and the Bank of Japan are among the participating authorities.

The Fed's expansion of liquidity, the biggest since credit markets seized up last year, came hours before the U.S. House of Representatives rejected a $700 billion bailout for the financial industry. The crisis is reverberating through the global economy, causing stocks to plunge and forcing European governments to rescue four banks over the past two days alone.

Comments

[Bjarni]

So much for needing a bailout.

[KillTheMessenger]

The bailout and the actions of the fed are not mutually exclusive. And they don't cure the same problems, either.

[thegreatgiginthesky]

Really. So what is this 630 billion going to cure? Is this going to pacify the poor CEO's?

[Hirnlego]

Tank the dollar and present the Amero?

[ErnestineBass]

I heard some things...(my Robert DeNiro impersonation)

[lizr]

I'd like to be paid in Euros myself...

[avraamjack]

.
Would it not be cleaner to create new banks with the .7 trillion ?
.
You could create 20 hefty banks and in 5 years sell the stock to the public.
.
No moral hazard, increased lending competition. All stated goals are met.
.

[darthdarcy]

Man this is getting really bad...the wheels are coming off...and we're heading for a deep ditch..!

[LouisvilleLiberal]

So...now they don't need money from future taxpayers? Cool !!

Why are they asking taxpayers for money when they have enough to do the bail out?

[NicasioKid]

Uh yeah - How come this just rolls out with nary a hiccup and we're agonizing over the bail out? Other very quiet giveaways - the big ol' chunky "loan" bailout of auto industry..and that huge chunk-o-change for the war, and.... reinstate the stock transaction surcharge and you raise about $150 billion per year, doesn't punish those who invest for long term.

[bjreed]

That's what I said....the only thing that makes sense is they wanted to be able to get the cover of the original Bailout Proposal. In other words the conspiracy theorists are correct, it's just a giveaway to their friends. One last fleecing before the criminals leave power!

[BernieBernie]

God hear the cries of his people!

[Luca]

Hey everyone. Don't panic. I hear that the US Government has secured a deal with Staples for the ink they use to run the printing presses. Keep those profits domestic!

[JimPivonka]

Absent the "rescue" package, the sooner the printing presses roll, the better.

[Essentialboom]

Yea.. if your a fan of inflation!

[6bd]

Currency swaps for 630 billion dollars, I do not recall hearing about that option when the urgent call for 700 billion was presented.

[nomadicexpat]

that is because these are overnight repo transactions being spread out globally to keep the system afloat in the face of a complete lack of faith

they are mutually exclusive and designed to address different parts of the crisis

[JimPivonka]

Thanks for being around to introduce some sanity to the conversation, nomadic. I cannot believe how willing people are to have terribly strong opinions in the absence of reality based information.

Thought that was a characteristic of the rightists and freepers....

[lechatnoir]

How cute. Turns out they don't need Congress after all...if anybody's still not sure what to think about the 'Fed'. try watching The Money Masters, it's got to be on google vids or sth. It's long and a bit boring after the first hour or so but it's way more researched than everything else, including Russo.

[KillTheMessenger]

The fed can make money available for the short term with a number of instruments for which is does not need a law. But these short terms loans do not address the underlying problem. They will not do much to prevent a deeper economic crisis.

[nomadicexpat]

the comments on this thread demonstrate that the people screaming the loudest have absolutely no idea how the financial system functions

youre getting what you wished for, everyone will be equal soon -- unfortunately we are racing back to the figurative stone age and u are pushing us downhill

[KillTheMessenger]

But you have to admit that the ones who scream the loudest have been heard by our politicians.

[mjtaylor22]

DO NOT PANIC, HAS EVERYONE FORGOTTON ABOUT THE JULY HOUSING BILL THAT GOES INTO EFFCET OCTOBER1 THAT IS
$300 BILLION ALREADY HEADED TOWARD THIS ISSUE
THE LENDERS WOULD HAVE TO TAKE A BUY DOWN ON THE MORTGAGES THOUGH.
HERE IS A LINK TO THE CNN ARTICLE

NOTICE ALSO THAT ON THIS PAGE
PAULSON IS SAYING THE BANKING SYSTEM IS SAFE.....
GOSH WE HAVE SUCH SHORT MEMORIES

Senate passes landmark housing bill
Controversial measure aims to help borrowers, bolster the housing market and provide a fail-safe for Fannie and Freddie. Bush is likely to sign it soon.

http://money.cnn.com/2008/07/26/news/economy/housing_bill_Sen...

By Jeanne Sahadi, CNNMoney.com senior writer
Last Updated: July 26, 2008: 2:25 PM EDT

NEW YORK CNNMoney.comm) -- The Senate on Saturday overwhelmingly passed a landmark housing bill that will offer up to $300 billion in loans for troubled homeowners and establish a government rescue plan for mortgage finance giants Fannie Mae and Freddie Mac.

The House passed the bill on Wednesday just hours after President Bush reversed his long-standing vow to veto the bill. Bush is expected to sign it soon.

The legislation, one of the most far-reaching on housing in decades, marks the centerpiece of Washington's efforts to address the nation's housing meltdown.

[nomadicexpat]

people repaying their mortgages is no longer the issue. we are in the midst of an institutional run on the banking system

Fortis, Bradford & Bingley, Wachovia, that Icelandic bank all go away today. Lehman, WaMu, Bear, AIG last week. People are talking about 3 more european banks now

do u really think that is because we have 850k foreclosures??? it is a MUCH MUCH bigger problem now and today's actions by the House have opened the very real possibility that we are on the verge of a systemic fault of the entire system

WAKE UP PEOPLE this is real .. you are letting your distrust of Bush translate intoa demand for inaction, and the politicans are letting our entire economic system unravel just to get the vote of those screaming the loudest

[sytgrl]

Excellent comment (as is your one above).

[KillTheMessenger]

The people who capitalize their posts will not take even a second to go to Wikipedia and look up how central banks work, what they do, what the different functions of their monetary policy are etc.. It's all there. All they have to do is to read, but they prefer screaming.

And that is probably the end of it. We have to see if the system manages to recover on its own because I do not think we have the political structure to do something productive about the problem.

[funkalicious]

Look Go to the BIS web site the Bank of international settlements do a search for derivatives
then read drill down through the banker econspeak and what you learn about is the notional value of derivatives.

Okay now think what is a great notion selling cdo's and CDO^2 SIV's MBS and all manner of swaps etc.. great idea one bet layed off on the next on the next in a great daisy chain of deals everything off sets the next.
The great amount of notional derivatives is a quadrillion 10to the fifteenth power or to
spend a dollar a day for 32 million years. But the theory goes that only 5% of any given trade is ever at risk.
Nice theory but the rub is this when the there is a bankruptcy the notional number becomes real and that number that is real is doubled because both sides of the trade become real and the domino's begin to fall...so it's like they pulled the plug on the game theory black boxes and the screen has flickered out. and the little boys want more quarters for the machine. a dollar a day for 32 million years...

[lizr]

it may be appropriate at this time for the entire thing to unravel, though...
we may need a whole new system that involves more socialism.

and these rt wing Reps will have midwived it into existence, to their dismay :)

[DubiousVoter]

You are very insightful, unlike most people.

Unfortunately though, it's too late -- Bush knows it and Paulson is just being a brave knight -- this "crisis" is as you say, "MUCH MUCH bigger" than foreclosures, let alone the paltry sums of $$ they're throwing at an economy that devours $1.2 Trillion in a few minutes.

This is a BLOODLETTING; you can see it in their eyes -- they're scared, so you and I should be scared too.

Bottom line is.... "THEY'VE" won! They found our weakne$$ on 9/11 and this is their counter punch. What a stinging attack on Bush/Cheney -- seven years on, seven weeks before the election...OUCH!!

Sadly, you and I are about to witness, first hand, the final demise of the Western Empire in all of its glorious misery. Live well!

[Everybody Should Vote]

Will McCain Re-suspend his Campaign?
http://voteforamerica.net/editorials/Comments.aspx?ArticleId=80&ArticleName=Will+McCain+Re-suspend+his+Campaign%3f

Sept 28 Polling Update
http://voteforamerica.net/editorials/Comments.aspx?ArticleId=79&ArticleName=Poll+Update+(9%2f29)

The Bailout Bill: First Impressions
http://voteforamerica.net/editorials/Comments.aspx?ArticleId=78&ArticleName=The+Bailout+Bill%3a+First+Impressions

Obama 292, McCain 246
http://voteforamerica.net/electoral.aspx

[bhshore]

.......................NEWS FLASH - - - - - - - - - CNN

US RUNS OUT OF GREEN INK - TO PRINT WORTHLESS CURRENCY......................

AS THEY PRINT THIS $$$$$$$$$$$ - - - IT WATERS DOWN EACH DOLLAR IN YOUR POCKET.

US RUNS OUT OF GREEN INK - TO PRINT WORTHLESS CURRENCY......................

AS THEY PRINT THIS $$$$$$$$$$$ - - - IT WATERS DOWN EACH DOLLAR IN YOUR POCKET.

US RUNS OUT OF GREEN INK - TO PRINT WORTHLESS CURRENCY......................

AS THEY PRINT THIS $$$$$$$$$$$ - - - IT WATERS DOWN EACH DOLLAR IN YOUR POCKET.

[sytgrl]

They might as well be pumping Monopoly money into the economy...

[KillTheMessenger]

That is exactly what they are doing. A lot of these moneys are needed for accounting purposes so the banks don't go belly up like flies.

[lizr]

the money is NOT worth the paper it is printed on.

[bhshore]

..........................................YES ...................................................

PT6 See Profile I'm a Fan of PT6 I'm a fan of this user permalink

SO INSTEAD OF $700 BILLION THEY PUT UP $630

--------WHY DIDN'T THEY DO THAT BEFORE??--------

--------HERE ARE THREE CREATIVE SOLUTIONS!-------

A MAN SO DISLIKED HE IS DISRESPECTED BY HIS OWN PARTY!

THIS IS A MASSIVE FAILURE IN LEADERSHIP BY A MAN THAT HAS ALLOWED CORRUPT ACTIVITY IN EVERY MARKET!

THE VERY PARTY THAT CREATED THIS CRISIS IS NOT BRAVE ENOUGH TO HELP SOLVE THE CRISIS!
WE NEED TO CLEAN THE REPBS OUT OF THE HOUSE, SENATE, AND THE EXECUTIVE BRANCH!

---------TRY AND CONVICT ROVE!---------

WHY SHOULD HE BE GETTING A MASSIVE CHECK FROM "FOX EM" FOR HIS COMMENTS WHEN HE IGNORES SUBPOENAS FROM CONGRESS!

HE IS ALSO WORKING FOR McFlipFlop and probably is getting a BIG CHECK THERE ALSO!

CONFLICT OF INTEREST!

TRY AND CONVICT!

----START IMPEACHMENT HEARINGS WEDNESDAY---------
Reply Favorite Flag as abusive Posted 03:23 PM on 09/