Was Friday the ‘tipping point’ for the economy?

On Sunday the Fed jumped in to prop up Fannie and Freddie. The problem is that they are holding a lot of souring assets that are worth a lot less than they’re booked for. That value is going to collapse from a lack of substance. If it’s not there, then it’s just not there! It’s just a matter of time.

Signs of the Times : Fed opens up a fire-hose of cash

Here’s a great graph found on the website of the 2008 Federal Reserve Bank of St. Louis. It reflects a part of the response to the ongoing financial crisis. Think the threat to the economy has been overstated? Take a look at the size of the response, reflected in this graph of the Total Borrowings of Depository Institutions from the Federal Reserve. The rules for borrowings have been changed, allowing the dollars borrowed to soar far above anything ever seen in the past.