this came from jim willie:

While there are zillion reasons to buy gold at the moment, another critical one may have surfaced overnight … one hidden from the public (what else is new). Jim Willie sent out the following this morning…

urgent notice on overnight bank loan failure

just got word from a reliable source with an excellent track record

he calls me every several weeks when he has something very critical to share

he wants me to put the word out and to see what comes back to confirm or add to the story

an extremely large overnight bank transaction loan failed last night, gathering major attention

it started in US west coast, went to Hong Kong, then Singapore, then London

it failed in London, by that is meant no return was given on the overnight loan

he guessed the size was something like $10 to $30 billion

he suspected (without much direct evidence) that it was Citigroup

he believes the failing bank is a London subsidiary for a giant US-based bank

he likened it to a plumbing blockage with extreme backup consequences

he expects a ripple effect to cause shock waves, or a flood of sewage

we wondered if it could have Commercial Paper consequences, since often used in overnights

he has five expert friends watching for specific market reactions, like LIBOR

this source said that in May June timeframe, foreign creditors will put the screws to the US bankers, who are recognized as totally corrupt ... foreigner big bankers want to remove some power levers from US control

and then this in response from bill murphy:

This is what I am hearing from my very good source:

It sounds like the Fed Bucket Brigade at work if it did occur ... meaning the loan was passed from the subsidiary of a large major bank to another. Then the collateral turned out to be bad, causing a failure. Thus, it ended up with the Fed supplying the money and taking the bad collateral, so as not to set off a bank run.

The other thing the source said was he thought the description of the problem sounded more like State Street, rather than Citi.

IF this occurred (NO CONFIRMATION thus far), it should show up tomorrow afternoon on FRB form H.4.1.

Time Will Tell