This tidbit from the Wall Street Examiner came via reader Scott:
Once upon a time, when faced with a market meltdown the Fed would have pumped a wad of cash nto the market and it would have been good for a rally of a couple or three hundred points. Today the Fed added a whopping $16.75 billion, and not much happened. It’s not a good sign. The Federal government is pulling out all the stops here, but if the FCBs are no longer playing ball, it won’t matter. The game will be over. Tomorrow night we’ll find out whether the FCBs have taken their ball and
gone home, or whether they are still in the game.
The Fed appears to have pressed the panic button today, adding $16.75 in overnight repos against no expirations. We’ve seen the
Fed do this in the past when the market was on the verge of a meltdown through major support. For the stock market to have such a nominal gain in the face of such an enormous cash injection shows just how bad things really are. The huge add brought the 5 day net to an add of $17.85 billion before weekly changes PDCF and Discount Window that won’t be known until tomorrow night. The Fed also settled the usual 1 day forward 28 day term repo rollover.
This is indeed sobering news on both levels: that the Fed is rattled enough to break glass and administer oxygen, and that the patient barely responded.