Wednesday's Discount Window Borrowing $7.1 billion -- biggest since after 9/11

Discussion in 'Wall St. News' started by Cruzan, Sep 13, 2007.

  1. Cruzan


    NEW YORK, Sept 13 (Reuters) - Banks more than doubled their requests for cash at the Federal Reserve's discount window in the latest week, according to central bank data published on Thursday.

    Financial institutions borrowed an average $3.16 billion per day in the week ending Sept. 12, compared with a $1.34 billion daily average for the prior week.

    Primary credit borrowings on the day of Wednesday Sept. 12 were $7.152 billion, the biggest for any single day since the aftermath of the Sept. 11 2001 attacks on New York and Washington.

    The Fed lowered the discount rate by a half percentage point earlier this month to 5.75 percent in an effort to combat a liquidity squeeze that began in high-risk subprime mortgages and has since spread to other sectors.

    The latest figures show that banks were increasingly willing to tap the discount window, usually considered a loan of last resort. This had mixed implications, suggesting that markets could become more liquid but also possibly that the need for funds was increasing as the credit crunch lingers.

    The bulk of the borrowing came from banks with strong credit ratings, with "primary credit" borrowing adding up to $2.93 billion.
  2. dhpar


    at least we know why stocks are up...
  3. My friend working at the BEP said they are printing so many dollars right now that they have called in for 70 more trucks to come in this week to help keep the printing going. I would say Cotton is going up up up take a look at NYBOT cotton futures.

    Forget gold people, you cannot make dollars with gold.

  4. dhpar


  5. S2007S


    dont fight the fed...

    how about dont fight free money handed to every trading desk on wallstreet to prop stocks up. Sad how they will do just about anything to keep the market from falling.
  6. Cruzan


    Your bars look just right, including matching colors! :D

  8. It's getting lame around here.

    Banks don't borrow from the discount window (the present being an orchestrated expception).

    They borrow from their correpsondents (which also at times purchase loan participations).

    OR ..................overngiht re-purchase agreements (repo's) which can have volatile rates materially away from prevailing rates.

    However, the Fed Funds Rate makes for a great alibi to raise (or lower) their Prime rate. Southwest Bank in St. Louis notorious for being the quickest.

    Even IF the discount window was.......................routine, it wouldn't be a news event.

    Moral suasion.

    We'll save the multiplier effect of credit expansion, Dutch Treasury auctions, the leverage of T-Bills, and open market operations for another day.
  9. JayS


    I get email alerts daily from letting me know what they are doing.

    They provide me email alerts when they do....

    - Temporary Open Market Operations when they happen.

    - Daily Fed Funds Effective Rate at the end of day.

    - When The Federal Reserve Bank of New York carries out foreign exchange-related activities on behalf of the Federal Reserve System and the U.S. Treasury.


  10. An effective rate and the extent of borrowings (if any) are two different things.

    A broker call rate is published daily. Doesn't mean too much.

    Incidently, correct me if I'm wrong, but I thought the flavor of the thread was what "banks" were doing rather than the Fed.

    Allright Jay, tell me about rate of change on M-3. Broadest measure of money supply and hence "liquidity". Used to be readily available at regular intervals. . It isn't now, and I'm not as resourceful as you.
    #10     Sep 14, 2007