Cowlesy
12-12-2007, 09:08 PM
The Federal Reserve along with the Swiss and European Central Banks have created a "Temporary Auction Facility", where the Fed will make term loans to Banks in total of about $40 billion. The idea is to inject liquidity into the market, but the killer is that the Fed will loan $0.85 on the dollar for many securities (CDOs/CLOs) of which no market value is readily determinable. Many of you heard that Etrade sold a pile of assets to Citadel, many of which were valued at $0.27 on the dollar.
The thing I read into this is that things must be worse than we all think that they are pulling wildcat moves like this. $40 billion isn't even a lot of money, so you can bank on the fact that more of these byzantine facilities are going to spring up.
I get my bonus check on December 17th. You can bank on the fact I'm transferring it right to my Merrill account and put it to work somewhere outside the U.S.
http://www.federalreserve.gov/newsevents/press/monetary/20071212a.htm
http://norris.blogs.nytimes.com/2007/12/12/fear-at-the-fed/
http://www.dealbreaker.com/2007/12/fed_using_very_old_valuations.php#more
The thing I read into this is that things must be worse than we all think that they are pulling wildcat moves like this. $40 billion isn't even a lot of money, so you can bank on the fact that more of these byzantine facilities are going to spring up.
I get my bonus check on December 17th. You can bank on the fact I'm transferring it right to my Merrill account and put it to work somewhere outside the U.S.
http://www.federalreserve.gov/newsevents/press/monetary/20071212a.htm
http://norris.blogs.nytimes.com/2007/12/12/fear-at-the-fed/
http://www.dealbreaker.com/2007/12/fed_using_very_old_valuations.php#more