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Thursday, October 09, 2008
Banks Borrow Record Amount From Fed's Discount Window
FOXBusiness
The Federal Reserve on Thursday said that total borrowing from its expanded discount window hit a record $430.87 billion on Wednesday.
The number for the prior week, $409.52 billion, had also been a record. Total average daily borrowing climbed to $420.16 billion from what had been a record $367.80 billion in the prior week.
The historic amounts reflect just how tight conditions are in the credit markets. With the economy sinking and several high-profile bank and brokerage collapses in recent months, financial institutions have been extremely hesitate to each other and are instead asking the Federal Reserve for capital.
Average daily lending through the primary credit facility, which is used by commercial banks, jumped to $75.01 billion from a record $44.46 billion in the previous week. Average daily borrowing through the Fed's primary dealer credit facility, which is used by investment banks, retreated slightly, falling to $122.94 billion on Wednesday after hitting a record $146.57 billion in the prior week.
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Most folks judge the health of a business by the revenue that comes in through sales. But not all revenue is equal. Companies can grow their sales by buying other companies, which means you don't get a clear view of how the real sales trends are moving.
So, many analysts, particularly those who look at retail, try to gauge what¿s known as "organic" growth, by looking at same-store sales. These are sales only at outlets open more than a year, so the metric can exclude any sales jump that comes from opening new locations. Retailers release same-store sales (which are frequently called "comps" since they're a true comparison from the previous period) every month.
Retail, incidentally, isn't the only industry to look at same-store sales. Hospital companies, also use the metric, to gauge how existing hospitals are performing compared to ones they just built or acquired.
