Another sign that banks are starting to turn the corner: latest Fed TAF auction undersubscribed

Although it may seem that the financial crisis is even worse than ever, we are increasingly seeing puzzle pieces of a solution fall into place. Just today, the latest Federal Reserve TAF auction for bank seeking credit for a term of 84 days was undersubscribed. The auction was for $150 billion in credit, but 71 financial institutions bid for only $139 billion of that. The interest rate on that money will be only 1.39%, so banks should have a lot of flexibility in what they can do with that money and still earn a profit on it.

-- Jack Krupansky