Facts and Figures on the Financial Turmoil

So far Tuesday morning, central banks around the world have injected more than $200B in the financial system. Here are the figures:

And here are some facts about Monday's price action:

USD/JPY - Biggest one day drop in 9 years

S&P500 - Biggest one day percentage drop since 9/11

30 Yr Treasuries fall to lowest level in 45 years

Fed Funds - Largest range since August 2007

Federal Reserve Liquidity Injection - Biggest since 9/11

Are we in unprecedented times? Yes.

The markets are pricing in a 100% chance of 2 rate cuts by December:

Comments

[NOITSNOT:]

Pardon my ignorance, but I'm just learning.. can anyone explain why do Central Banks inject money to the economy? Is it to allow Banks to get easier access to cash to sustain their operations? Any brief, to-the-point explanation will be highly appreciated.

2008 Sep 16 12:28 PM

[mdmrjsds:]

You hit it right on the head. They give banks extra money to throw around in the marketplace, to be sure they aren't running short. It is also part psychological, to give the markets a feeling that everything is under control, is business as usual. Whistling past the graveyard.

I'm probably not the best person to comment on this as I think the current system is akin to witch doctory or voodoo. Every time I investigate it I have to shake myself to realize that there are people who actually take it seriously. Like visiting a cult, and when you leave realizing your skin is crawling.

Here is a link where you can read more if you are so inclined.

www.ny.frb.org/markets...

2008 Sep 16 02:42 PM

[mdmrjsds:]

I thought of another analogy of how I view the Federal Reserve.

It is as if you went into your doctor's office and he said to you "We need to shave your head and apply leeches to drain the watery humors." or "The fiery humors have taken control. We will wrap you in cloths and dip you in ice water until your humors are balanced."

2008 Sep 16 03:06 PM

[kkin365:]

It is surprising that UUP is holding up so well in the light of all these bailouts. Any reasons?

2008 Sep 17 09:34 AM