Ahem.

Release Date: November 12, 2008

For release at 10:00 a.m. EST

On November 10, 2008, the Federal Reserve conducted an auction of $150 billion in 17-day credit through its Term Auction Facility. This was a forward auction designed to provide term funding over year-end--the awarded loans will settle on December 22, 2008. Following are the results of the auction:

Stop-out rate:	0.528 percent
Total propositions submitted:	$12.629 billion
Total propositions accepted:	$12.629 billion
Bid/cover ratio:	0.08
Number of bidders:	16

The awarded loans will mature on January 8, 2009. The stop-out rate shown above will apply to all awarded loans.

Institutions that submitted winning bids will be contacted by their respective Reserve Banks by 11:30 a.m. EST on November 12, 2008. Participants have until 12:30 p.m. EST on November 12, 2008, to inform their local Reserve Bank of any error.

http://www.federalreserve.gov/newsevents/press/monetary/20081112a.htm

Note the bid-to-cover.

No further explanation necessary.

Well, ok, maybe there is one necessary.

Less than 10% of the available credit was drawn down.

Why?

Because when cash becomes competitive with short-term credit in terms of return (that is, cash yields zero, short-term credit costs and yields zero) then there is no reason to take risk; you're better off with the cash.

Ben pointed his liquidity gun at the market, pulled the trigger, and got......

CLICK.

Game's over Ben; you no longer have "liquidity" to shower on the market; there's no take-up.

Now we're left with either (1) doing the right thing or (2) Weimar Germany-style printing.

Oh, to Henry Paulson, who is lying once again on national TV this morning:

Shut the hell up.

You're full of crap.

You've prevented nothing.  You have in fact lied to Congress about the purpose of your $700 billion "TARP", which has been used to buy up competitors and pay bonuses, and you changed tax policy without a vote of Congress in the dark of night, which you STILL haven't talked about in public.  You didn't know what you were doing originally and it is obvious that you still don't.

Your (and Bernanke's) continued cheerleading and falsehoods have destroyed business and consumer confidence.  Every time you open your mouth the market tanks, because you still have not decided to tell the truth.  "Securitizing credit" is a pointless exercise until the excessive debt is defaulted, as there is no demand for additional credit when the consumer is tapped out and businesses are failing.

You continue to talk about increasing credit in the system when the cause of the problem in the first place was excessive credit creation. 

YOU PERSONALLY lobbied Congress and The SEC to PERMIT that excessive credit creation, were rejected once in 2000, and in 2004 you came back as CEO of Goldman Sachs and GOT WHAT YOU WANTED - a policy change that WAS THE DIRECT AND PROXIMATE CAUSE OF THE MESS WE ARE NOW IN.

You have REFUSED to accept that responsibility and you continue to talk about "recovery" and "reform" but you and YOUR demands for removal of safeguards in 2000 and 2004 ARE WHY WE ARE HERE.

THERE IS NO SOLUTION TO THIS PROBLEM NOR WILL THE ECONOMY FIND A BOTTOM AND RECOVER UNTIL YOU STOP TRYING TO FEED A DRUNK WITH LIVER CANCER WHO IS PUKING UP BLOOD MORE BOOZE, AND IF YOU DON'T STOP THIS CRAP AND SOON THE DRUNK (OUR ECONOMY, OUR MONETARY SYSTEM AND POSSIBLY OUR POLITICAL SYSTEM) IS GOING TO DIE. 

WHEN THAT HAPPENS, NOT IF, YOU, CONGRESS AND PRESIDENT BUSH WILL BEAR THE PROPER RESPONSIBILITY FOR THE ENSUING DEPRESSION, ONE THAT IS LIKELY TO SURPASS THE 1930s BOTH IN SEVERITY AND DURATION.

It is time for you to accept responsibility for your actions and their consequences, resign, and for the government to invite adults into the room before we have another fiscal "accident" - this time in the Treasury market as the world decides that buying government debt from a liar is a really, really bad idea.