by Pam Martens and Russ Martens
Wall Street on Parade
On both days this week that the New York Fed offered its $30 billion in 14-day repo loans to 24 trading houses on Wall Street, there was far more demand than the New York Fed had preannounced it would provide. On Tuesday, the demand was for $59.05 billion while the New York Fed provided only $30 billion. On Thursday, the demand was for $57.25 billion while the New York Fed provided $30 billion. In short, there is a growing demand for long-term loans at affordable rates on Wall Street – meaning one or more trading houses has a borrowing problem. The Fed’s loans this week were made at a below-market interest rate of 1.60 percent.
The demand for the 14-day loans came on the same days that the New York Fed also funneled huge amounts of money in one-day loans to Wall Street’s trading houses: $64.45 billion on Tuesday and $46.75 billion on Thursday. Cumulatively, since the Fed began making these unprecedented repo loans to Wall Street’s trading houses on September 17 of last year, it has pumped over $6.6 trillion into Wall Street.