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  • September 24, 2008 at 9:13 PM #13948
    capeman
    Participant

    With the bailout argument not going well for Bernanke/Paulson in front of our House and Senate, what is the motive for draining liquidity out of the system when the main reason for the “Bailout” argument is to increase liquidity? $125 Billion pulled out in four days time and why would they be doing this now?

    [img_assist|nid=9018|title=Slosh Report Repos 9.24.08|desc=|link=node|align=left|width=466|height=394]

    As Karl Denninger states here…

    http://market-ticker.denninger.net/archives/590-FLASH-Fed-Speaking-Out-Both-Sides-Of-Mouth.html

    Draining the swamp gives a chance for bodies to float to the top. Would WaMu be the body surfacing this week that would scare folks into passing a bailout? With a deposit base nearly 3X FDIC holdings a failure would be quite intense and shocking to the markets.

    [quote]S&P’s counterparty credit rating on WaMu was cut to CCC/C from BB-/B, while the preferred-stock rating was cut to CC from B-. Its outlook on the preferred stock remains negatives.[/quote]

    With preferred shares and risk ratings at junk status and the CDS spreads widening like the Grand Canyon could we see this failure going into a weekend of intense debate over the “Bailout” bill? What if it is deliberately hastened for the purpose of scaring government into passing the bill hastily?

    This argument is purely rumor unless and until it actually happens but if the Fed and Treasury heads are playing deadly games with our financial system in order to get it bailed out they need to be unseated immediately!

    If rumor somehow does become fact whether it’s a WaMu or other institution, anyone against this bill needs to double up on the phone calls and faxes through the weekend to make sure their voices are heard over any possible scary financial nuclear mess.

    September 24, 2008 at 10:53 PM #274992
    jficquette
    Participant

    The Banking system normally only keeps a few billion in actual cash on hand. The rest is lent to other banks for short term, overnight needs.

    Due to the panic banks are hording cash and not lending it out to others. As of last week it was approx $90 Billion. That is why the Fed put in $180 billion in intrabank liguidity last week. It was done to give banks confidence that they didn’t have to horde money.

    The cash horded comes out of the liquidity pool.

    John

    September 24, 2008 at 10:53 PM #275243
    jficquette
    Participant

    The Banking system normally only keeps a few billion in actual cash on hand. The rest is lent to other banks for short term, overnight needs.

    Due to the panic banks are hording cash and not lending it out to others. As of last week it was approx $90 Billion. That is why the Fed put in $180 billion in intrabank liguidity last week. It was done to give banks confidence that they didn’t have to horde money.

    The cash horded comes out of the liquidity pool.

    John

    September 24, 2008 at 10:53 PM #275245
    jficquette
    Participant

    The Banking system normally only keeps a few billion in actual cash on hand. The rest is lent to other banks for short term, overnight needs.

    Due to the panic banks are hording cash and not lending it out to others. As of last week it was approx $90 Billion. That is why the Fed put in $180 billion in intrabank liguidity last week. It was done to give banks confidence that they didn’t have to horde money.

    The cash horded comes out of the liquidity pool.

    John

    September 24, 2008 at 10:53 PM #275294
    jficquette
    Participant

    The Banking system normally only keeps a few billion in actual cash on hand. The rest is lent to other banks for short term, overnight needs.

    Due to the panic banks are hording cash and not lending it out to others. As of last week it was approx $90 Billion. That is why the Fed put in $180 billion in intrabank liguidity last week. It was done to give banks confidence that they didn’t have to horde money.

    The cash horded comes out of the liquidity pool.

    John

    September 24, 2008 at 10:53 PM #275313
    jficquette
    Participant

    The Banking system normally only keeps a few billion in actual cash on hand. The rest is lent to other banks for short term, overnight needs.

    Due to the panic banks are hording cash and not lending it out to others. As of last week it was approx $90 Billion. That is why the Fed put in $180 billion in intrabank liguidity last week. It was done to give banks confidence that they didn’t have to horde money.

    The cash horded comes out of the liquidity pool.

    John

    September 25, 2008 at 7:30 AM #275371
    capeman
    Participant

    This chart only shows Fed added liquidity. Any drop is due to the Repos maturing and the Fed not replacing them in the market. It is a huge net negative especially since the Fed and Treasury seem to be the sole sources of liquidity to the credit markets these days.

    September 25, 2008 at 7:30 AM #275354
    capeman
    Participant

    This chart only shows Fed added liquidity. Any drop is due to the Repos maturing and the Fed not replacing them in the market. It is a huge net negative especially since the Fed and Treasury seem to be the sole sources of liquidity to the credit markets these days.

    September 25, 2008 at 7:30 AM #275303
    capeman
    Participant

    This chart only shows Fed added liquidity. Any drop is due to the Repos maturing and the Fed not replacing them in the market. It is a huge net negative especially since the Fed and Treasury seem to be the sole sources of liquidity to the credit markets these days.

    September 25, 2008 at 7:30 AM #275052
    capeman
    Participant

    This chart only shows Fed added liquidity. Any drop is due to the Repos maturing and the Fed not replacing them in the market. It is a huge net negative especially since the Fed and Treasury seem to be the sole sources of liquidity to the credit markets these days.

    September 25, 2008 at 7:30 AM #275305
    capeman
    Participant

    This chart only shows Fed added liquidity. Any drop is due to the Repos maturing and the Fed not replacing them in the market. It is a huge net negative especially since the Fed and Treasury seem to be the sole sources of liquidity to the credit markets these days.

    September 25, 2008 at 8:36 AM #275326
    CA renter
    Participant

    Pretty sure I heard Steve Liesman mention something about forcing a bank to fail last night/this morning on Squawk Box.

    It was a one-sentence blurb, and no follow-up to the conversation, IIRC.

    Just sayin’…

    September 25, 2008 at 8:36 AM #275330
    CA renter
    Participant

    Pretty sure I heard Steve Liesman mention something about forcing a bank to fail last night/this morning on Squawk Box.

    It was a one-sentence blurb, and no follow-up to the conversation, IIRC.

    Just sayin’…

    September 25, 2008 at 8:36 AM #275076
    CA renter
    Participant

    Pretty sure I heard Steve Liesman mention something about forcing a bank to fail last night/this morning on Squawk Box.

    It was a one-sentence blurb, and no follow-up to the conversation, IIRC.

    Just sayin’…

    September 25, 2008 at 8:36 AM #275379
    CA renter
    Participant

    Pretty sure I heard Steve Liesman mention something about forcing a bank to fail last night/this morning on Squawk Box.

    It was a one-sentence blurb, and no follow-up to the conversation, IIRC.

    Just sayin’…

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