This report from Bloomberg:
Rates in the $7 trillion-a-day market for borrowing and lending securities show that the logjam in credit markets is approaching the level seen after the March collapse of Bears Stearns Cos.Securities that can be borrowed at interest rates close to the Federal Reserve’s target rate for overnight loans between banks are called general collateral. Notes and bonds that are in the highest demand in the repurchase, or repo, agreement market are called “special” by traders because rates on loans secured by these securities are lower than the general collateral rate.
The CHART OF THE DAY shows the spread of the general collateral repo rate below the Fed’s target rate of 2 percent. The gap, which averaged 0.06 percentage point in the 10 years prior to August 2007, when subprime mortgage losses spread, is now 1.25 percentage points. A wider spread indicates a greater scarcity of Treasuries. The spread reached 2.05 percentage points on March 19 after the central bank engineered the takeover of Bear Stearns by JPMorgan Chase & Co.
“Clearly we are in a high-risk premium mode, just as we were in March,” said Piyush Goyal, an interest-rate derivatives strategist at Barclays Capital Inc. in New York. “Lack of investor confidence, exacerbated by quarter-end concerns, has tilted the repo markets in favor of the collateral owners.”
Aha, the last TAF auction was on the 22nd, the next isn’t for a week plus. Unless the Fed staggers the dates of the increase in the facility, we won’t see relief from it for a bit. I see no press release on the Fed’s website, despite the report on Bloomberg. Weird.
aw70 
Posts
IMHO, Paulson needs to be fired, as does Bernanke and Cox; they all can be replaced by minions and underlings. IMHO, this would help market stability and generate confidence in the future, as Congress investigates this systemic collapse. The damage done by these people connected to SIFMA, mirrors the synthetic derivative meltdown on wall street, thus in order to rid America of this cancer, we need to start with these tumors and then work to root out corruption.
RE: Welcoming Paulson to the Cabinet, Bush praised the economy under his own watch. “The American economy is powerful, productive and prosperous, and I look forward to working with Hank Paulson to keep it that way.”
“He’s earned a reputation for candor and integrity and when he’s confirmed by the Senate he will be a supburb addition to be Cabinet,” Bush said.
Snow has been Treasury secretary since February 2003. He took over for Paul O’Neill, who was forced to resign because of policy disagreements with the White House.
Snow has been a loyal proponent of the administration’s economic policies, traveling the country as a salesman for Social Security reform and an overhaul of the tax code. But his standing suffered as both proposals stalled.