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Bernanke: Come to My Window

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Some punk analyst (No really, some Punk Ziegel & Co. analyst) is accusing the Fed of forcing the major banks to borrow from the discount window. Market analyst Richard Bove thinks Bernanke sweetly serenaded JPMorgan, Bank of America, Wachovia and Citi to a tune of "Come to my window / Borrow cash, even though you don't need to / Come to my window / I'll cut rates soon." From MSN:

The discount rate, though lower than it was last week, is still higher than the 5.25 percent federal funds rate, which is what banks pay to borrow from one another. Plus, because of the $38 billion in cash the Fed has pumped into the system, banks are charging only 4.9 percent for overnight loans, Bove said. A statement from three of the banks that borrowed from the discount window said they wanted to "demonstrate the potential value of the Fed's credit facility and encourage other banks to use it."

The whole thing was a "P.R. gig," like getting knocked up by David Crosby. The banks took the dough to remove the stigma on borrowing money from the Fed as a credit line of last resort (and of getting inseminated by a drugged out musician), and to encourage smaller banks to do the same.
Ahead of the Bell: Federal Reserve [AP via MSN Money]