The Discount Window is still open, but then again, it always is open. Banks just hesitate to use it. In the month and a half following the Fed’s first drop in the Discount Rate, the actual borrowing has been much less meaningful than the hype. I guess Ben has learned from the stock market guys how to manipulate market psychology.

The new H.4.1 report shows that average borrowing for last week was only $88 million and Wednesday’s ending balance is back to zero. To some commentators, this decline has implied that the credit market crisis is over. So why the hell do I keep doing these monthly updates? I don’t believe it’s over.

Using the Discount Window activity as a measure of banking trouble is useless. There were zero borrowings before the Fed acted in mid-August. Except for ceremonial support of the Fed by the four biggies, there were zero borrowings at the peak of the crisis. When the discount window was finally tapped in the week before the second rate cut on September 18th, the loans quickly went away. Now, that we are back to zero it’s a challenge to figure out what all those zero’s mean. What did 0,000.00 mean before we knew there was a crisis and DOW was 14,000? Answer: Zero. What did 0,000.00 mean when the crisis was so extreme that Ben needed to screw the shorts with his well-timed dramatic cut to the Discount Rate? Answer: Zero. What does 0,000.00 mean today? Answer: Zero.

So now that the real financial journalists have decided this story is not exciting enough to waste their time trying to confuse the issue or spin what it means, I will continue. However, unless there is something meaningful to say, I will just have a one line summary that says, “The Discount Window had Zero borrowings again this week” and a link to the report. Just remember, it means ….Zero. I point this out so the next time the media decides to overemphasize what this report tells us, you’ll know they have no clue.