The Fed's lending to distressed institutions is going berserk.

For most of the decade, banks largely avoided borrowing from the Fed. There was plenty of cheap money available elsewhere. They had little reason to submit to the extra scrutiny that it required. And there was little stress in the banking system.

Now, all that has changed.

Now, borrowing at the Fed's discount window has surged - from a weekly average of a meager $1 million per day at its low point last year to a weekly average of $18,469 million per day last week.

What would be the growth rate of an explosion of that magnitude? "Only" 1.7 MILLION percent - not exactly a sign of stability in our financial system.

The fact is the Fed's lending is going berserk, a blatant indicator of severe stress and more big troubles ahead for banks.