This is amazing.  ECB injecting $500 billion into the banking system to ease the credit crunch.  Great, but who’s going to lend money with all the toxic waste STILL out there?  How does this address the fundamental problem?   The ECB just borrowed Ben’s helicopter but no one is picking up the dollar bills.

Dec. 18 (Bloomberg) — The cost to borrow in euros through the end of the year plunged after the European Central Bank added an unprecedented $500 billion to the banking system as part of a global effort to ease gridlock in the credit market.

The amount banks charge each other for two-week loans in euros dropped a record 50 basis points to 4.45 percent, the European Banking Federation said today. The rate had soared 83 basis points in the past two weeks as banks anticipated a squeeze on credit through year-end.

“These are strong-arm tactics intended to show the market they’re seriously committed to breaking the deadlock,” said Marc Ostwald, a fixed-income strategist at Insinger De Beaufort SA in London. “The ECB is helping to bankroll banks out of a problem that they themselves created.”

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