Friday, March 28, 2008

Non borrowed bank reserves: Negative $61.788 billion

Take a look at the following link:

Look at the second column of the non-borrowed reserves of depositary institutions. For the first eleven months of 2007, it averaged $40 billion. Now it's a negative $61 billion!

Today you'll see news that the Fed is providing another $100 billion to the banks:

The Federal Reserve announced Friday it will auction an additional $100 billion in April to cash-strapped banks as it continues to combat the effects of a credit crisis.

The central bank said it would make $50 billion available at each of two auctions, on April 7 and April 21.

Through the end of March, the Fed has provided $260 billion in short-term loans to commercial banks through the innovative auction process. It also has employed Depression-era provisions to provide money to investment banks.

Maybe they should just take some of this paper and put it in the warehouse that never was!