So how did all the Term Auction Facility auctions go last week? The banks wanted far more dollars than what was offered in both the 84-day and 28-day versions, a strong indication that liquidity remains skewed in the post-subprime bubble world. The patient still needs a lot of oxygen, but there wasn’t enough in the tanks.

The first ever 84-day TAF auction held by the Federal Reserve attracted 64 banks and $54.8 billion in bids for the $25 billion in funds offered. The European Central Bank drew 54 banks bidding $38.52 billion for the $10 billion available; and 25 banks attended the Swiss National Bank’s $2-billion, 84-day auction, asking for $9.8 billion. The old-familiar 28-day auctions last week were also oversubscribed. And on top of that the ECB greased the liquidity pipeline with a 50-billion euro (around $73.34 billion) three-month supplementary refinancing operation. Just a typical $184.34-billion week of central bank support.

There’s no bottom yet visible in this crisis. To the contrary, the fear is palpable: a study of 146 institutions in North America and Europe by Greenwich Associates shows that almost 60 percent of respondents expect “another major financial services will fail as a result of the ongoing crisis in global markets” in the next six months, with additional 15 percent predicting such a collapse within 12 months. According to 77 percent of those surveyed, “counterparty risk in credit default swaps represents a serious threat to global financial markets.”

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