Hung Out to Dry

The current tightness in the credit markets is no secret. And no move to alleviate the iced-up market is working.

The Federal Reserve has tried every possible fix:

They've slashed their Fed Funds rate by three percentage points in roughly eight months.


They've implemented money auctions through their lending facilities.


They've opened up their discount window to banks and primary institutions, practically accepting a half-eaten peanut butter and jelly sandwich as collateral for loans.


And they've even stepped in on an individual basis to spot JPMorgan Chase on their bailout of Bear Stearns.
But what have they actually accomplished so far?

Lenders are being given access to affordable money, but they're stopping the flow dead in its tracks. Instead of passing that money along to would-be borrowers, they're using it to seal up the holes left from the losses they suffered when an era of irresponsible lending practices came to a grinding halt.

One of the most noticeable changes: The end of blockbuster mergers, acquisitions, and buyouts.