A dam burst and helicopter drop all at once?

As I've recently been noting, the Treasury is sitting on a pile of cash- we might, recalling Fed Chairman Bernanke's idea of a "helicopter drop" of money, consider this one huge payload.

At 4PM today (when the Treasury posts its daily statement) I found that the helicopter has begun to drop its payload. $115B of TARP money was distributed, which leaves $593B left to drop.

Coincidentally, the Fed decided to drop its key rates by 50 basis points, bringing the Funds rate down to 1%.

Additionally, the Fed announced: Today, the Federal Reserve, the Banco Central do Brasil, the Banco de Mexico, the Bank of Korea, and the Monetary Authority of Singapore are announcing the establishment of temporary reciprocal currency arrangements (swap lines). These facilities, like those already established with other central banks, are designed to help improve liquidity conditions in global financial markets and to mitigate the spread of difficulties in obtaining U.S. dollar funding in fundamentally sound and well managed economies.

Of late, many financial commentators have noticed the wide spread between the Fed Funds rate and Libor rates. It seemed as if there was a dam keeping liquidity in the US and not allowing it to reach emerging markets starving for US$s.

With this Fed creation of new swap lines, that dam may be about to burst.

To recap, the Treasury has begun the release of 5% of GDP in financial sector recapitalization and direct credit market support, coupled with substantial declines in the Fed Funds rates, even more substantial increases in the monetary base and new Fed swap lines to emerging markets.

Now that's financial shock and awe!

or, if you prefer, a Tsunami allegory:

When a tsunami is unleashed, right before the waves start to hit, the water recedes dramatically and then begins to flood in....wave after wave.

Was the most recent substantial withdrawal of credit (and coincident decline in equity and commodity markets) the water receding before the Tsunami hits?

Link