Tuesday, September 30, 2008

Yes, this is working out well! 

The reports on NPR this morning were excruciating, with "liquidity" "greasing the wheels" so the "cogs of business" did not "seize up". I would love for someone, anyone, to show me a cog that needs greasing.
I know this may be pointing out the obvious, but I think it needs to be said: Lenders have to lend, just as much as borrowers have to borrow.

"I {heart} liquidation."
The cost of borrowing overnight dollars on global money markets soared on Tuesday despite central banks pumping billions into the banking system to prevent it seizing up further after US lawmakers� rejection of a $700 bn financial rescue bill panicked markets.

The scramble for cash as banks sought to square their books over the end of the quarter saw the European Central Bank lend $30 bn dollars overnight at a huge rate of 11% � more than five times the Federal Reserve�s 2% target rate � and call for bids for an additional $50 bn.

Meanwhile, the London interbank offered rate (Libor) for overnight dollars jumped by a record 430 basis points to 6.87%, the highest in at least 7-1/2 years.


Enjoy that stock market rise today.