Wall St banks 'hooked on emergency funds scheme'

[tpsbmam]

Fears are mounting that Wall Street banks are relying too heavily on tens of billions of dollars in loans made available by the US Federal Reserve. Their borrowing levels have rocketed by almost 200 per cent to $38bn (£19bn) a day in just three weeks.

The latest loan data released by the Fed shows that Wall Street banks and investment firms borrowed an average of $38.4bn every day last week, a big jump from the $32.9bn borrowed the week before, but almost three times the $13.4bn borrowed when the emergency scheme was launched on 17 March.

The loan programme was part of a wider Wall Street rescue package ushered in to stave off the imminent collapse of Bear Stearns, the troubled investment bank being bought by JP Morgan.

The scheme, called the Primary Dealer Credit Facility, is made available through the Federal Reserve Bank of New York and is designed to help big investment banks oil the wheels of the credit market so they can continue with business as usual, even though the credit crunch shows no signs of abating.

The Fed has capped the amount available to all banks at $50bn, although insiders said it never imagined the banks would take advantage of the entire facility. Analysts and economists now fear it is being too heavily exploited, and that banks may be using it to delay facing up to liquidity problems.

[hobbit709]

1. Ain't corporate welfare grand?

But if you go under because of debt it's yoyo time.(You On Your Own)

[Warpy]

4. Consider the alternative

No banks were helped out by the Hoover administration. The effect was that people said money just disappeared overnight. The cash economy was gone completely, and people were left with what they had stashed in the sock drawer and no idea when or if the bank would reopen so they could get their savings out to survive on.

Debt is poison and no economy that is founded on it can survive for long. People just reach a point at which their income is devoted to servicing the debt with barely enough left over for subsistence living. We're at that point now. The days of floating a middle class life on a starvation wage plus a credit card are over, whether or not the news has gotten to a lot of suburbanites.

[Bonhomme Richard]

2. They are now doing what strapped consumers have been doing.

Take the credit cards to the max in order to rob Peter to pay Paul.
This can't be good.

[sam sarrha]

3. the home loan scandal is a big Bu$h Crime Family Ponzy Scheme... it will only get worse till we cut

losses..

this is just like the one Bu$h41 pulled on the Savings and Loans...
only half a trillion times worse...

[stopfascism]

5. Delay the inevitable

while the stuffed shirts at CNBC are telling you we worked through the subprime mess and declare a bottom to the market, alls well, send in Kramer to tell you to buy their stock...it's as bad as watching the Bush network declare the surge is working and tell us how well were winning the war in Iraq. We need another boycott...the mother of all boycotts that will tell these POS networks to stop their f***ing lying.

[sharesunited]

6. How many posts do I need to accrue in order to be able to say

welcome to DU!

[stopfascism]

9. thank you

It takes 240 posts...lol

[Demeter]

7. Link?

AND Would you consider posting in the Stock Market Watch Thread on Monday?

[tpsbmam]

8. Damn, I hate it when I forget to post the link! Sorry -- here it is.... will try to

remember to post. If i forget, please feel free to post it yourself.

http://www.guardian.co.uk/business/2008/apr/06/useconomy.usa

[libodem]

10. Which Bush brother

did the failed Savings and Loan? Was it Neil? Jeb? I think it's a failed Saving and Loan scandal on a National basis. These fiends hate the Government and want to bring it down. They figure they can fail all they want to and Big Brother will have to pick up the tab. These people have NO ethics. All they want to do is find more illegal was to cash in, before they make a law against what they are doing. This is just Enron on a National scale. Our government has been hijacked by criminal scam artists, the likes of which RICO, has never encountered. This is National racketeering at it's finest. We don't know what has hit us and won't know until it's over. It's like having the Sopranos's running the government. It's a crime syndicate family. Crooks!