Well, The Fed has met the clinical definition of insanity: doing over and over exactly the same thing but expecting different results.
Repo injections demonstrate a) Fed panic and desperation and b) serve to show The Fed's own lack of confidence in banks, and more broadly, the Bond and Stock Markets.
Sooooo...they were at it again today, this time with a mid-day cash injection of 500 billion, and it didn't make one iota of difference: stocks continued to slide with The DJ experiencing the largest point drop in its history.
That's like taking a bicycle tire and trying to install it on a car. Just wait until the other real shoe drops, namely, banks leveraged 100 to 1 on derivatives. That will be the mother of all stock market drops when that sucker finally bursts -- and it will, likely sooner than later.
If you're a praying person, it would be a good idea to start now and keep it up.
Meanwhile, limited bank runs have already begun in NYC. And that's just the beginning.
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