Fed Boosts Cash Auctions to $900 Billion, May Do More (Update3) - Bloomberg

http://www.bloomberg.com/apps/news?pid=20601087&sid=apVp3yespCX8&refer=home

Oct. 6 (Bloomberg) -- The Federal Reserve will double its auctions of cash to banks to as much as $900 billion and is considering further steps to unfreeze short-term lending markets as the credit crunch deepens.

``The Federal Reserve stands ready to take additional measures as necessary to foster liquid money-market conditions,'' the central bank said in a statement released in Washington today. Fed and Treasury officials are ``consulting with market participants on ways to provide additional support for term unsecured funding markets,'' the statement said.

Today's steps follow a hoarding of cash by banks that sent the premium on the three-month London interbank offered rate over the Fed's benchmark interest rate to a record. Industrial companies are also finding it harder to raise cash after the market for commercial paper shrank to a three-year low as investors flee even borrowers with few links to mortgages.

``It is pretty much all out war,'' said Christopher Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd., New York. ``They are pulling out all the stops to try and get borrowers and lenders to meet and do transactions once again.''

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Welcome Americans, once again, to the 2nd Republicon Great Depression.

You'll enjoy your experience as long as you remembered to fraudulently acquire mass sums of money and hide it well in the Cayman Islands. The rest of you, who have forgotten to do so, will experience some turbulence. Please put your seats in the upright position, put your tray tables up, put your head between your knees and kiss your butt goodbye.

Thank you for participating. :bounce: