Friday, August 10, 2007
Central banks on both sides of the Atlantic have been busy creating new money out of thin air in an effort to bolster ailing capital markets which appear to cave in under the load of risk that was disregarded until now.
After a mountain of new cash coming out of the ECB the Federal Reserve served markets again with a $19 billion breakfast via its weekend repo. This brings the liquidity added since Thursday to a total amount of $43 billion.
According to a report by LaRouche the European money market had been closed down for the first time in history on Thursday, allowing the ECB to funnel money to the banks in big trouble. Rumours are flying that another major German bank is on the brink of collapse.
Draw your own conclusions; mine is to short banking stocks and the market in general.