Lehman will be remembered

Henry M Paulson_2
Henry M Paulson,  Jr
Secretary of the Treasury

A pivotal point, in my opinion, credit is tightening within a weak economy.

According to this Bloomberg note, today:

Sept. 15 (Bloomberg) — The Federal Reserve added $70
billion in reserves to the banking system, the most since the
September 2001 terrorist attacks, to keep bank borrowing costs
low after the bankruptcy of Leman Brothers Holdings Inc.    

Fed funds traded as high as 6 percent, or 4 percentage
points above the central bank’s target rate for overnight loans
between banks, according to ICAP Plc, the world’s largest inter-
dealer broker. The margin is the greatest since Bloomberg began
tracking the data in 1998. The rate dropped to as low as
1.75 percent after the Fed added the temporary reserves.    

      

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