January 30, 2008 (LPAC)--Normally, we don't pay a lot of attention to statistics from the Federal Reserve, mainly because they never seem to reflect reality (the statistics go up, the economy goes down). Still, we keep an eye on them in the hope that something interesting will pop out. The chart below, from the Federal Reserve Bank of St. Louis, shows a series called Net Free or Borrowed Reserves of Depository Institutions, or NFORBRES (see http://research.stlouisfed.org/fred2/series/NFORBRES?rid=19) , which shows how much money the banks have borrowed in the Fed Funds market or from the Fed's discount window, in order to meet their reserve requirements. According to the St. Louis Fed, the banks fell off the cliff at the end of 2007, with the banks falling from $1.3 billion in net reserves in November, to a whopping minus $13.7 billion in December.