The Fed’s run out of money

[tekisui]

http://ftalphaville.ft.com/blog/2008/09/17/16019/the-feds-run-out-of-money/

Seriously. It’s broke. Here’s the statement from the US Treasury:

The Federal Reserve has announced a series of lending and liquidity initiatives during the past several quarters intended to address heightened liquidity pressures in the financial market, including enhancing its liquidity facilities this week. To manage the balance sheet impact of these efforts, the Federal Reserve has taken a number of actions, including redeeming and selling securities from the System Open Market Account portfolio.

The Treasury Department announced today the initiation of a temporary Supplementary Financing Program at the request of the Federal Reserve. The program will consist of a series of Treasury bills, apart from Treasury’s current borrowing program, which will provide cash for use in the Federal Reserve initiatives.

Announcements of and participation in auctions conducted under the Supplementary Financing Program will be governed by existing Treasury auction rules. Treasury will provide as much advance notification as possible regarding the timing, size, and maturity of any bills auctioned for Supplementary Financing Program purposes.'’

[tama]

1. SOMA

System Open Market Account, wellcome to the Brave New World of Aldous Huxley... ;)

[tekisui]

3. Have a little soma. You'll feel better.

Nice catch.

[NightWatcher]

2. heard Hartmann say, but cannot find links, that we are selling off some of our gold reserves

[tekisui]

4. Amazing.

So, we are selling off some of our only "real value" to hand over to foreign and domestic corporations' bad debt?

The truly amazing thing is none of these steps do anything except kick the can down the road. $700 billion buys nothing but a little time.

[magellan]

5. And remember, this is the bucket that can be emptied and refilled

Not to exceed $700bn at any one time....

We're screwn no matter what they do. This country is insolvent.

[Lasher]

6. That's exactly what the objective is.

Create a suckers' rally from now until election day if they can.

[TomClash]

7. More debt covering debt

which covers more debt.

Ponzi would be proud.

[Festivito]

8. Perhaps this is why they wanted such fast approval of the bailout.

Big drips, but drips none the less.