Fire up the Mother of All Credit Cards!
Fresh off the news that the Federal Reserve doled out $1.2 trillion in previously undisclosed loans to banks (story here) in 2008 comes today’s news of the Fed’s latest Bailout of the World — euphemistically known as a global “coordinated action:”
Central banks from developed nations Wednesday took coordinated action to shore up the global financial system as Europe’s rolling debt crisis continues to trouble markets.
The action by the U.S. Federal Reserve, the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank makes dollar funding cheaper for European banks that hold dollar-denominated securities or make U.S. dollar loans, but doesn’t address the fundamental problems related to European government debt that now plague the financial system.
“The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity,” the Fed said Wednesday in a statement.
The central banks agreed to lower the pricing on existing temporary U.S. dollar liquidity swap arrangements. The move cuts the rate by 50 basis points, taking the new rate down to the U.S. dollar overnight index swap, or OIS, rate plus 50 basis points, the Fed said.
“This is a very big deal if you are trading Eurodollar contracts … but it doesn’t change any of the fundamental issues in Europe,” said Michael Cloherty, head of U.S. interest rate strategy at RBC Capital Markets.
Doug Powers: Gird Your Coins.
ZeroHedge: “Luckily, when this step fails, which it will, Mars can always come and bail us out.”
Sing with me: We are the world. We bail out their children…blog comments powered by Disqus
Obama calms nerves: Don’t be fooled by social media, the world isn’t much crappier than it was before I was elected
August 29, 2014 09:06 PM by Doug Powers
August 28, 2014 08:50 PM by Doug Powers
‘Phony scandal’ update: Lois Lerner’s Blackberry ‘wiped clean’ of info after congressional probe began
August 26, 2014 08:50 PM by Doug Powers
August 21, 2014 09:20 PM by Doug Powers