Fed loans out $30B to banks at 3.95% interest rate

[sinkingfeeling]

WASHINGTON — The Federal Reserve, working to combat the effects of a serious credit crisis, said Tuesday it had auctioned $30 billion in money to commercial banks at an interest rate of 3.95%.

It marked the third in a series of auctions the Fed began last month as a way to provide cash-strapped banks with the reserves they need. The hope is that the increase in resources will keep banks lending to consumers and businesses and prevent the credit turmoil that hit in August from pushing the country into a recession.

The 3.95% interest rate is the lowest of any of the three auctions the Fed has held. The other two auctions saw rates of 4.65% and 4.67%.

http://www.usatoday.com/money/economy/2008-01-15-fed-auction_N.htm

So are 'booming economy' is all done with smoke and mirrors?

[trotsky]

1. smoke and mirrors, yup.

But don't worry! The ultra-rich will be just fine. Whew!

[rodeodance]

2. Think of the impact of these low-interest loans went directly to the people -in-need.

[ordinaryaveragegirl]

11. Exactly...

It would have been a lot more helpful to everyone to give that money to all the people on the verge of losing their homes. Economic stimulus, anyone?

Of course, this is the BushCo administration, so all power to the ones with money, and screw the ones without. KWIM?

[underpants]

3. Laissez-faire capitalism at its best

There are winners and losers and the system exposes both.

[yourout]

4. Wont help much.

Middle class Joe is tapped out due to rising fuel, food, and living cost increases.

Most home equity has been eaten up by debt and stagnant home prices while property taxes continue their relentless climb.

Most of the so called Bush economy has been a shell game of trading stagnant wages and cheap overseas goods for home equity and the game is over.

[Angela Shelley]

5. They are "auctioning" the loans

so that the public will not find out which banks are in trouble.

UUUUUGGGGHHHH

[earth mom]

10. Yikes!

:scared:

Why aren't people K & Ring this to the greatest page?!

[benld74]

6. They in turn put it out at 5-7% and more - and this helps who exactly?

[MadHound]

7. The fundamental flaw here is

That while banks may now be flush with cash for lending purposes, the people in this country aren't, they are cash strapped, and maxxed to the gills on credit. No matter how much money you release into the system, if people aren't buying or borrowing, we're still screwed.

[Ikonoklast]

8. The Fed is a scam and a shell game

They operate for the benefit of their shareholders, to the detriment of the people of this country.

This is nothing more than a bail-out of the investment class financed by the taxpayers.

[enid602]

9. print

They should just let the banks print the money themselves. Eliminate the middleman.

[SammyWinstonJack]

12. K&R

[Marie26]

13. If they'd given these low-interest loans

to homeowners instead of banks, we wouldn't have this problem.

[HCE SuiGeneris]

14. Time to hike the income tax to pay for the interest then. C'mon people, let's mortgage ourselves

right into bankruptcy and servitude.

[femrap]

15. Poor little banks....they need money.

They couldn't seem to manage to loan $$ to people who were decent risks, could they? No...and now we have to the bail out the stupid assholes. F*cking Corporations.