One Billion, Gagillion...

Fafillion, shabolubalu million illion…yen.

This morning the Fed announced that it would increase both the 28 day and 84 day Term Auction Facility (TAF) to $150 billion each. I think that brings the total to about $900 billion. Or gagillion, or whatever. The TAF is a short term loan made to anyone with a pulse that shows up at the Fed’s discount window. The discount window collateral requirements have been made, well, more “flexible”. Give us your poor, your tired, your huddled worth less (or worthless) paper (mutual funds, certificates of deposit, foreign bonds, muni bonds, collateralized loan and debt obligations, other asset backed securities including mortgage, auto loans and credit card receivables, etc.). Since banks are not lending to each other, through the TAF the FED is acting as a proxy lender, quite literally the lender of last resort. But that’s not working either.

Also, thanks to The Emergency Economic Stabilization Act of 2008 (EESA for short), the Fed is now paying interest of 75 basis points below the current Fed funds rate of 2%; sort of like a sneaky-little-almost-stealth rate cut.

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Citigroup and Wells Fargo were pursuaded to stop their fighting and decided to tag-team Wachovia.

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Under the Hope for Homeowners program, The Federal Housing Administration (FHA) is now coming off the bench for Fannie and Freddie (who've both been placed on the injured list) and will guarantee up to $300 billion (fafillion) in home loans for struggling buyers. David Olson, former director of market research at Freddie Mac said, "FHA has completely replaced subprime and Alt-A. I hope it's not setting them up for another crackup. There have been so many crackups."

Hmm, crackups. At least it's good to know that we've learned our lesson and are no longer putting people in homes that they can't afford.

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Australia's central bank cut rates a full percentage point in what's sure to be a worldwide race to the bottom.

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The bloodbath continued as markets across the globe plummeted for a second day in a row. In Brazil, trading was halted twice before the Bovespa Index fell 13%, making it the worst year-to-date performing major index in North and South America.

On Monday the Russian Micex Index went into freefall and also had to be halted twice before finishing down 19% for the day. Trading in Russia has had to be halted four times now in one week. The Russian ruble fell to its weakest point in almost 19 months against the dollar. We won the cold war, now we're winning the luke warm war. Suck it Ruskies.