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FED pumps $630 Billion into stock exchange 29th Sept

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posted on Sep, 30 2008 @ 11:00 AM
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FED pumps $630 Billion into stock exchange


www.bloomberg.com

Sept. 29 (Bloomberg) -- The Federal Reserve will pump an additional $630 billion into the global financial system, flooding banks with cash to alleviate the worst banking crisis since the Great Depression.

The Fed increased its existing currency swaps with foreign central banks by $330 billion to $620 billion to make more dollars available worldwide. The Term Auction Facility, the Fed's emergency loan program, will expand by $300 billion to $450 billion. The European Central Bank, the Bank of England and the Bank of Japan are among the participating authorities.

The Fed's expansion of liquidity, the biggest since credit markets seized up last year, came hours before the U.S. House of Representatives rejected a $700 billion bailout for the financial industry. The crisis is reverberating through the global economy, causing stocks to plunge and forcing European governments to rescue four banks over the past two days alone.

``Today's blast of term liquidity will settle the funding markets down, and allow trust to slowly be restored between borrowers and lenders,'' said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. On the other hand, ``the Fed's balance sheet is about to explode.''

The MSCI World Index of stocks in 23 developed markets sank 6 percent, the most since its creation in 1970. Credit markets deteriorated further as authorities tried to save more financial institutions from collapse.

European Rescue

European governments have rescued four banks in two days and the Federal Deposit Insurance Corp. said today it helped Citigroup Inc. buy the banking operations of Wachovia Corp. after its shares collapsed. The Standard & Poor's 500 Index fell 3.8 percent and the cost of borrowing dollars for three months rose to the highest since January. The rate for euros hit a record.

``If people think the authorities may give in to fears, they are wrong,'' Financial Stability Forum Chairman Mario Draghi said today in Amsterdam, where the international group of regulators and finance officials is meeting. ``There is willingness and determination on winning the battle to restore confidence and stability.''

Banks and brokers have slowed lending as they struggle to restore their capital after $586 billion in credit losses and writedowns since the mortgage crisis began a year ago. The bankruptcy of Lehman Brothers Holdings Inc. also sparked fears among banks they wouldn't be repaid by counterparties, driving up the cost of short-term loans between banks.

Funding Risk

``By committing to provide a very large quantity of term funding, the Federal Reserve actions should reassure financial market participants that financing will be available against good collateral, lessening concerns about funding and rollover risk,'' the central bank said.

The Bank of England and the ECB will each double the size of their dollar swap facilities with the Fed to as much as $80 billion and $240 billion, respectively. The Swiss National Bank and the Bank of Japan will also double their dollar swap lines, while the central banks in Australia, Norway, Sweden, Denmark and Canada tripled theirs.

All the banks extended their facilities until the end of April 2009.

The Fed is also increasing the size of its three 84-day TAF sales to $75 billion apiece, from $25 billion. That means the Fed will make a total of $225 billion available in 84-day loans. The central bank will keep the sales of 28-day credit at $75 billion.

Special Sales

In addition, the Fed will hold two special TAF sales in November totaling $150 billion so banks can have funding available for one or two weeks over year-end. The exact timing and terms will be determined later, the Fed said. The TAF program began in December, totaling $40 billion.

The bank-rescue plan being debated by Congress today would give the Fed more power over short-term interest rates by providing authority as of Oct. 1 to pay interest on reserves held at the central bank by financial institutions. That would make it easier for the Fed to pump funds into the banking system.

Paying interest on reserves puts a ``floor'' under the traded overnight rate, which would allow a central bank ``to provide liquidity during times of stress'' without affecting the rate, New York Fed economists said in a paper last month.
(visit the link for the full news article)



[edit on 30-9-2008 by XXXN3O]

[edit on 30-9-2008 by XXXN3O]

[edit on 30-9-2008 by XXXN3O]




posted on Sep, 30 2008 @ 11:00 AM
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I have not noticed this story being paid much attention but I thought it was important.

Everyone was forced by the media to focus on the $700 bailout plan yesterday by every mainstream media channel yesterday but I noticed this tiny little snippet mentioned on Bloomberg late yesterday.

This happened just before the vote on the bailout yesterday so going with the assumption that the bailout would have been passed which almost everyone thought would happen in reality they are looking for a figure closer to $1.4 trillion.

I will be keeping a close eye on this as I think our attention is being diverted here and thought it was worth highlighting this.

www.bloomberg.com
(visit the link for the full news article)

[edit on 30-9-2008 by XXXN3O]



posted on Sep, 30 2008 @ 11:03 AM
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Wow so the Fed basically said screw your bailout I will print an equivalent sum anyway. It really does take arrogance to do what they do sometimes.

By the way, you should fix the title, its 630 BILLION not million



posted on Sep, 30 2008 @ 11:05 AM
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reply to post by vegno
 


Thanks and well spotted!!



Yes either that or they had actually planned to have a total of almost 1.4 trillion but either way they are diverting attention here.



[edit on 30-9-2008 by XXXN3O]



posted on Sep, 30 2008 @ 11:07 AM
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reply to post by XXXN3O
 
Looks like yesterdays vote was just a symbolic gesture. This is exactly what our economy does not need more monopoly money. People will need to learn how to barter if they want to bring down the one world slave plantation which is being constructed.



posted on Sep, 30 2008 @ 11:09 AM
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reply to post by eradown
 


Yes, it is really ironic that the people are all thinking they got a victory yesterday by getting congress to vote no to the bailout and its interesting that the shares are still plummeting.

I wonder if this has happened in the past bailouts but its not been noticed?



posted on Sep, 30 2008 @ 11:09 AM
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Here is Ron Paul explaining the relevance of the OP.
ca.youtube.com...



posted on Sep, 30 2008 @ 11:10 AM
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This brings up an interesting idea.
I've heard the Rockafellers somehow owe the Rothchild's a large sum of money and if they where not paid before the collapse then they where to be exposed to the public.
No one voted on the Fed to put the 630 Bil into circulation.
No one heard of the idea before they did it.
It was done even though the bailout bill was rejected
And last but not least, the numbers seem a lot alike even though the bailout bill "Was not based on any information, we just wanted a really large number"
Coincedense?



posted on Sep, 30 2008 @ 11:17 AM
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reply to post by Snift
 


Coincidence?

I think it was all planned.

I also think it may have been possible that a lot of politicians got distracted with the bailout bill to even hear about this $630 Billion bailout before it happened.

I have not heard a single peep from any UK News source about I just happened to be watching Bloomberg last night and it came up next to the stock ticker for about a minute.


[edit on 30-9-2008 by XXXN3O]



posted on Sep, 30 2008 @ 11:27 AM
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reply to post by XXXN3O
 
Although they have given themselves 630 billion dollars ,they are still demanding 700 billion dollars. I bet the greedy scum are planning to use the 700 billion dollars to buy gas and oil futures.



posted on Sep, 30 2008 @ 11:28 AM
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www.abovetopsecret.com...


was posted ysterday as well



posted on Sep, 30 2008 @ 11:32 AM
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reply to post by Harlequin
 


I didnt notice that it had been posted, I thought it was important that people should know this thanks for pointing it out.

I am shocked it has not got attention. People are singing the praises about the $700 billion bailout failing and the people having a voice but right under the noses this happens.

[edit on 30-9-2008 by XXXN3O]



posted on Sep, 30 2008 @ 11:36 AM
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Yes, this topic has been covered.

Fed Pumps Further $630 Billion Into Financial System

Please add comments to the existing thread.

Closed.



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