The Federal Reserve is allowing CitiGroup and Bank of America to make massive transfers to their brokerage sides.

Jesus H. Christ on Toast!!! Doesn’t anyone remember what happened during the depression???? It’s why, until the mid 1990s, banks were forbidden to own brokerage houses.

This unusual move by the Fed shows that the largest Wall Street firms are continuing to have problems funding operations during the current market difficulties, according to banking industry skeptics. The Fed’s move appears to support the view that even the biggest brokerages have been caught off guard by the credit crunch and don’t have financing to deal with the resulting dislocation in the markets. The opposing, less negative view is that the Fed has taken this step merely to increase the speed with which the funds recently borrowed at the Fed’s discount window can flow through to the bond markets, where the mortgage mess has caused a drying up of liquidity.

These rules are not for good times, they are for times like now. They are there to prevent the financial system from going down the drain as good money follows bad.

Helicopter Ben has made a very bad move.