Monday, September 29, 2008

Chronicles Of Depression 2.0: #276: Freeze

Central banks redouble efforts to save bank system
NEW YORK/FRANKFURT (Reuters) - The world's central banks redoubled their efforts on Monday to revive the paralyzed global financial system through massive injections of cash.

To counteract a world financial crisis emanating from last year's mortgage meltdown in the United States, the Federal Reserve announced a $330 billion expansion of arrangements to boost U.S. dollar liquidity throughout the global financial system.

The action increases the reciprocal swap lines with the European Central Bank and eight other central banks to $620 billion from $290 billion previously, the Fed said in a statement.

The Fed announcement came after European and Asian central banks had already been busy pumping more money into sclerotic banking systems on Monday, in an effort to persuade financial firms to stop hoarding cash, which threatens to bring down global economy.

"They are throwing billions around, but things seem to be getting worse. They are throwing everything they can at the problem but nothing seems to be working," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

"There's a monster amount of fear out there. This is global contagion, it's no longer just the United States."

The efforts also show the heightened tensions in bank-to-bank lending markets as the approaching end of the financial quarter compounds the scramble for cash.

Emphasis added by me.


So now we have another factor here: They're all trying to cover their asses for public reporting requirements!

One of the factors I just mentioned in Chronicles Of Depression 2.0: #273: Your Card:
3) Clean balance sheets are king

Meanwhile, the world's financial system appeared to be edging closer to collapse by the day, authorities in Europe and the United States struggling keep banks afloat with injections of cash, nationalizations and mergers of necessity.

Emphasis added by me.

Do all of you get it yet? How many times must it be reported that the entire global system of finance is on the brink of utter ruination?

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