Fed still pumping money. Support from the Fed for US banks and other financial groups ran at close to a trillion US dollars a day in the past week. Figures released earlier today on the Fed’s website show that banks borrowed an average $US437.53 billion a day in the week to Wednesday. That was up from just over $US420 billion a day in the previous week. The Term Auction facility, which lends money at auctioned rates to banks for 28 day periods averaged $263.1 billion.

Primary credit borrowings through the Fed’s discount window averaged $US99 billion a day, up from $US75 billion a week earlier and loans to primary dealers averaged $Us133.87 billion, up from $US122.94 billion a week ago.

“Other credit extensions”, mostly reflecting loans to insurer AIG, were $US82.86 billion on October 15, against $70.30 billion as of October 8 and the Fed lending to banks to enable them to purchase asset-backed commercial paper from money market mutual funds fell to $US122.76 billion from $US139.48 billion on October 8. That is a small indication that the run on these mutual cash trusts was perhaps moderating. — Glenn Dyer

Is Michael West having a lend? His article on Keynes is utter rubbish. Far from not understanding speculative bubbles, Keynes was an astute observer of markets, a successful speculator and provided detailed and colourful analysis of the role of greed and fear in periodically driving asset prices away from fundamental values.

Far from being a ‘liberal fascist’, whatever that is, Keynes was a principled moderate, who resigned from the British delegation to the reparations negotiation following World War I, correctly predicting that taking economic revenge on Germany would prevent stable reconstruction, leading to economic collapse, extreme political solutions, and ultimately, another world war. Far from being an ivory-tower academic, Keynes was instrumental, with Harry Dexter White of the US, in establishing the Bretton-Woods institutions (World Bank and International Monetary Fund) that helped underscore a period of growing international capital flows and trade. Far from being doctrinaire, Keynes was a pragmatist, famously remarking: “When I see that I am wrong I change my mind. What do you do?”

Well, what do you do, Michael West? — Dr Sacha Vidler, Economist, Industry Super Network

Things not so e-e-easy at Clive Peeters? Pressure is mounting on Clive Peeters managing director Greg Smith to post sales figures and profit guidance for the first quarter of FY09. Clive Peeters has so far not posted any updated information to the ASX, despite rival listed retailers Harvey Norman and JB Hi-Fi doing so.

Whilst it is not mandatory to post these reports, both Harvey Norman and JB Hi-Fi have been very proactive in this regard, with their respective leaders Gerry Harvey and Richard Uechtritz writing to the ASX to notify the market of updated sales activity. — Current.com.au

He said that? And here, with the understatement of much more than a mere month, Oliver Schupp, president of Credit Suisse Index Co. Oliver:

September was a difficult month for hedge funds across strategies…

Which sounds so much more palatable than “September was the worst month in hedge fund history and everybody’s hair’s on fire.” — Naked Shorts

The financial system, perhaps, has been saved. Now, what about homeowners? So far, attempts to slow the foreclosure epidemic at the center of the crisis have had little impact. Despite “voluntary” industrywide efforts to rework troubled mortgages — efforts that Treasury Secretary Henry Paulson jawboned banks and mortgage servicers into undertaking last fall — the numbers continue to soar. In 2008 some 1.69 million homeowners will lose their houses — double the rate of two years ago, says Rod Dubitsky, managing director for asset-backed securities at Credit Suisse. He thinks 3.6 million more foreclosures could pile up through 2012. — BusinessWeek

Peter Fray

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