I love the quotations. So? Who was it? Anyone care to wildly speculate? Somehow I have a feeling you won't find any little Goldman rat footprints here.

Who got cockblocked by the discount window? Great question!

Via Market Ticker:

"Someone" paid 7% for overnight money on the Fed Trading system last night (that "someone" was a bank, by the way.)

This will be claimed to be "ordinary" end of quarter distortions for closing the books.

Don't believe it for a second.

Let's put this in plain language: The discount window is open for any bank that has good collateral at less than 1/10th of that interest rate.

Therefore there is absolutely no reason for any institution to go into the Fed Funds market for overnight money at 7% unless they have no good collateral to post against it and thus cannot go to the window.

So who is it? No idea. And while the amount borrowed overnight at that rate may be tiny, that's not the point - the point is that the last time we saw anything that dramatic was just before it all went "boom" last year.

Yes, I'm sure that end-of-quarter had something to do with it. In fact, I'd be stunned if it did not.

However, as I noted, there's no reason for anyone to pay that if they have good collateral to post at the discount window, given that you can do so for 1/10th or less the price.

Remember, kids, this isn't about saving the financial backbone of America. It's about keeping the wheels on long enough to get the valuables off the sinking ship.