Keep BORROWING AND BORROWING, why didnt the federal reserve step in years ago to prevent this problem from even happening, no one comprehends the magtitude of this credit crisis. Without the discount window you would see the markets in more chaos, but the federal reserve knows how to pump the market up. Dealers double pace of discount window borrowing Fri Mar 28, 2008 3:03am EDT INSTANT VIEW:JP Morgan to buy Bear, Fed cuts discount rate 16 Mar 2008 NEW YORK (Reuters) - Primary dealers more than doubled their direct borrowing from the Federal Reserve to $32.92 billion a day in the latest week, showing they needed cash amid ongoing strains in global money markets. The volume of borrowing at the discount window contrasts with the impression of lackluster demand for Treasuries from dealers in a $75 billion 28-day Federal Reserve Term Securities Lending Facility (TSLF) auction just hours before the Fed released its weekly discount window data on Thursday. Analysts had initially interpreted the auction to show that dealers' need to park tainted mortgage assets temporarily at the central bank in exchange for Treasuries they can lend out for cash was less pressing than earlier thought. But the huge volume of borrowing at the discount window, exceeding even last week's hefty sums, appeared to signal that the financial system is indeed heavily reliant on the Fed's support to continue functioning smoothly. "I wouldn't get too carried away by the inferred signs of strength of the financial sector from the TSLF auction," said Josh Stiles, bond strategist and managing director with IDEAglobal in New York. The pace of discount window borrowing from primary dealers "paints a little bit of a different picture," he said. That scenario is more somber, Stiles said, adding that beleaguered financial stocks may have a long way to fall. In just the second week that non-commercial banks have been allowed to tap the Fed directly for funds via the discount window, the amount outstanding attributable to Wall Street banks as of Wednesday had mushroomed to $37.02 billion from $28.80 billion a week earlier, the Fed data showed. Total discount window borrowing averaged $33.48 billion a day in the latest week, up from $19.05 billion the previous week, the data showed.