With injection of $360B into system, one expert predicts its "balance sheet is about to explode."

[babylonsister]

Fed Pumping $630B Into System

With the Fed injecting $630 billion into the financial system, one expert predicted that its "balance sheet is about to explode.''

Fed Pumps Further $630 Billion Into Financial System (Update3)

By Scott Lanman and Craig Torres
Enlarge Image/Details

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.

more...

http://www.bloomberg.com/apps/news?pid=20601087&sid=a9MTZEgukPLY&refer=home

[old guy]

1. Isn't this what the $770B bailout was for?

Do we still need the bailout money to avert disaster? Am I mixing apples and oranges?

[babylonsister]

2. No, this is different money injected into the system yesterday before

the bailout vote:

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4126010&mesg_id=4126010

[Karenina]

3. THAT ONE was about

turning the keys of the Treasury over to ideologues and stripping the citizenry of redress for grievances.