Scary graph

[unixronin]

Commentary:  Someone elsewhere commented that this needs to be a log scale, and is meaningless if it's not in adjusted dollars.

I disagree.  Adjusted dollars or not, anyone can see that this is blip, blip, blip, blip, blip, HOLY FUCK.  Sure, the dollar has tanked. But it hasn't tanked THAT much.  The dollar's lost maybe half its 1985 value, not 98% of it, which is the sort of depreciation that would be required to bring that vertical spike into scale with the other blips.

As for a log scale?  On a graph like this, the only thing a log scale would serve is to hide the data and make it look much, much less significant.  Most people do not think in terms of log scales (hell, most people don't understand what a log scale is).  If you're releasing log-scaled graphs for the public at large, you're doing it to mislead them and make the spikes look as much smaller as you can get away with.

Comments

[skellington.livejournal.com]

The short answer is that the vast majority of "depository institutions" in the US are, for the most part, broke.

To prevent everything from imploding, the Federal Reserve has chosen to inject more cash into the system by loaning banks money (since lowering the fed funds rate is not going to be effective for various reasons.)

In the past, borrowing from the Fed was generally considered a sign of financial weakness, and everyone avoiding doing it at pretty much all costs. Various new programs, plus absolute desperation, have made it acceptable. So while this chart is interesting, you really need to get into discussions of how the Term Auction Facility the other programs they introduced work, and other measures of how badly the banks are screwed.