Denninger on Fed '23A' Exemptions (More Bank Bailouts)

"Bernanke pulled the safety pins out of the banking system when he waived the 10% affiliated capital limits. This was done for ONE bank back earlier this year, but just recently, he did it for four large primary banks..."

This is why commentators are missing the market when they say the Fed is contracting the money supply -- while that may be true for us Main Streeters, it is NOT true for the major banks, because these kind of exemptions have massive implications for reserve capital. In short, they have the effect of allowing large amounts of "off-balance-sheet" leverage at the major banks. The Fed doesn't want any unsightly "implosions" here like the Germans, Canadians, and French have seen (due to our own unsound capital markets).

See here for the exemption letters Denninger is talking about.