I still think Virgin is full of crap, because they dont have enough cash to paste this deal together! No one does, unless they knit together a string of SIVs, CDOs and other forms of offsheet collateral junk, which is not good for shareholers on need of real disclosure!
"Builders' lobbyist: We made too many homes - Chief of National Association of Home Builders says overbuilding by some members was one factor in the housing meltdown."
Of course nobody does, that's why the BoE will be nationalizing Northern Rock. Besides if NR gets cannibalized and Scottish & Newcastle gets bought by Carlsberg, who'll be left to sponsor Newcastle United?
For those who can't put the name to a face, HBOS is Halifax bank and Bank of Scotland(not RBS)
Libor Stays at 7-Year High as Credit Squeeze Persists
"...
The highest short-term rates in seven years suggest that the first coordinated central bank action since the Sept. 11, 2001, terrorist attacks may not be enough to revive interbank lending. The cost of borrowing dollars fell 7 basis points to 4.99 percent, about half what was anticipated, based on prices of Libor futures contracts.
It's not going to help us find an exit to this crisis,'' said Cyril Beuzit, head of interest-rate strategy at BNP Paribas SA in London.These measures aren't going to address the root cause of the crisis. Banks are still reluctant to lend money to each other because there are serious concerns about potential further bad news.''
..."
The Federal Reserve Bank of New York said Thursday it will redeem the full amount of maturing Treasury bills now in its holdings, totalling $15 billion. The bank said it will "continue to evaluate the need for the use of other tools, including further Treasury bill redemptions, reverse repurchase agreements and Treasury bill sales." The move follows a similar redemption of $5 billion on Monday. "They're using every weapon in the book to get some kind of relief with bank funding, over the year-end," said Thomas diGaloma, head of Treasury trading at Jefferies & Co.
This entire impairment write off trend is about the fact that every bank and lending agency lowered requirements for collateral and thus they accepted higher risks in exchange for fees. This trend obviously exploded but now all the central banks are going to lower collateral standards and increase the payoff terms in exchange for a slightly higher fee. This is retarded!
Re: writedown total was connected to the floating-rate notes, which have seen their values fall as spreads in the credit markets have widened.
In reagrd to previous post ranting about exchanging risky collateral for a premium, might I add that Einstein said something to the effect, "that you cant solve a problem on the same level from which it was created"
It does seem symetric in that the borrowing rates are going to rise as collateral becomes weaker, thus since most lenders are almost belly up, The Central Banks are going to open up the flood gates for easier terms with less collateral for the crack whore bankers that want more cash to bet with!
Berkshire's (BRK.A) Warren Buffett said yesterday that he expected "major divergences" in financials results during the next year. With earnings declines expected across the sector, the fact that Wachovia will grow them, it should be one of the winners in the category
Re: Buffett, reinsurance and impairments somewhat related to collateral and LIBOR: Nov. 30 (Bloomberg) Buffett, who isn't charged with wrongdoing, may testify for prosecutors, according to court papers. They're trying to prove executives at AIG, the world's biggest insurer, and General Re, a unit of Buffett's Berkshire Hathaway Inc., sought to deceive investors about AIG's ability to absorb losses. Maurice ``Hank'' Greenberg, AIG's former chief, is an unindicted co-conspirator, defense lawyers say in court filings.
ac, this happened before the August cut in the Discount Rate. In order not to really be printing money, as opposed to being accused of printing money, the Fed drains cash out of the system to offset any increase (either of maturity or amount) of the term loans (Open Market Desk repo's or the new TAF collateral-backed loans), always misnomer'd as injections.
The Fed figures if its going to put money into the system, it'd better take some out elsewhere. When the Treasury pays off a maturing bond the Fed owns, the Fed "disappears" (see Catch-22) the cash.
The goal is that the monetary base, the only thing the Fed can control, stays flat or shows only a moderate and restrained growth.
Naturally, the response from the Financial Community is wails of hyperinflation, or wails of "Not enough!". Both remind me of our dog.
ac, this happened before the August cut in the Discount Rate.
To amplify psychodave's point, they did $5B in redemptions last Thu., $5B today and announced the $15B that you mentioned for next Thursday, thus totally $25B. That comfortably funds the the first $20B tranche of TAFs.
I failed to communicate that the Fed did similar redemptions well before the August credit crunch. Your itemization of the most recent redemptions is even better.
I still think Virgin is full of crap, because they dont have enough cash to paste this deal together! No one does, unless they knit together a string of SIVs, CDOs and other forms of offsheet collateral junk, which is not good for shareholers on need of real disclosure!
OT - But good for a laugh..
Builders CEO: Some of blame rests with overbuilding - Dec. 13, 2007
"Builders' lobbyist: We made too many homes - Chief of National Association of Home Builders says overbuilding by some members was one factor in the housing meltdown."
Of course nobody does, that's why the BoE will be nationalizing Northern Rock. Besides if NR gets cannibalized and Scottish & Newcastle gets bought by Carlsberg, who'll be left to sponsor Newcastle United?
For those who can't put the name to a face, HBOS is Halifax bank and Bank of Scotland(not RBS)
Yikes.. This may complicate the move to visit the confessional by European Banks.
Libor Fails to Drop From 7-Year High; Crunch Persists (Update7) - Bloomberg.com
Libor Stays at 7-Year High as Credit Squeeze Persists
"...
The highest short-term rates in seven years suggest that the first coordinated central bank action since the Sept. 11, 2001, terrorist attacks may not be enough to revive interbank lending. The cost of borrowing dollars fell 7 basis points to 4.99 percent, about half what was anticipated, based on prices of Libor futures contracts.
It's not going to help us find an exit to this crisis,'' said Cyril Beuzit, head of interest-rate strategy at BNP Paribas SA in London.These measures aren't going to address the root cause of the crisis. Banks are still reluctant to lend money to each other because there are serious concerns about potential further bad news.''
..."
I'm guessing that these writedowns are only a hint of what is to come. I doubt that these banks are being absolutely forthcoming.
Is this an attempt to drive down CP rates?
The Federal Reserve Bank of New York said Thursday it will redeem the full amount of maturing Treasury bills now in its holdings, totalling $15 billion. The bank said it will "continue to evaluate the need for the use of other tools, including further Treasury bill redemptions, reverse repurchase agreements and Treasury bill sales." The move follows a similar redemption of $5 billion on Monday. "They're using every weapon in the book to get some kind of relief with bank funding, over the year-end," said Thomas diGaloma, head of Treasury trading at Jefferies & Co.
I don't understand.
Fed to redeem $15 bln in Treasury bill holdings
This entire impairment write off trend is about the fact that every bank and lending agency lowered requirements for collateral and thus they accepted higher risks in exchange for fees. This trend obviously exploded but now all the central banks are going to lower collateral standards and increase the payoff terms in exchange for a slightly higher fee. This is retarded!
Re: writedown total was connected to the floating-rate notes, which have seen their values fall as spreads in the credit markets have widened.
Considering Euro finance hs always be driven by banking rather than equity markets, is this really suprising?
In reagrd to previous post ranting about exchanging risky collateral for a premium, might I add that Einstein said something to the effect, "that you cant solve a problem on the same level from which it was created"
Boo bank retards!
It does seem symetric in that the borrowing rates are going to rise as collateral becomes weaker, thus since most lenders are almost belly up, The Central Banks are going to open up the flood gates for easier terms with less collateral for the crack whore bankers that want more cash to bet with!
Was that acidic?
Berkshire's (BRK.A) Warren Buffett said yesterday that he expected "major divergences" in financials results during the next year. With earnings declines expected across the sector, the fact that Wachovia will grow them, it should be one of the winners in the category
FDIC Board Meeting Dec. 19, 2007 Agenda:
FDIC: Board Meetings
Re: Buffett, reinsurance and impairments somewhat related to collateral and LIBOR: Nov. 30 (Bloomberg) Buffett, who isn't charged with wrongdoing, may testify for prosecutors, according to court papers. They're trying to prove executives at AIG, the world's biggest insurer, and General Re, a unit of Buffett's Berkshire Hathaway Inc., sought to deceive investors about AIG's ability to absorb losses. Maurice ``Hank'' Greenberg, AIG's former chief, is an unindicted co-conspirator, defense lawyers say in court filings.
Ex-General Re Officials' Trial May Highlight Buffett (Update3) - Bloomberg.com
"I don't understand."
ac | 12.13.07 - 12:15 pm
ac, this happened before the August cut in the Discount Rate. In order not to really be printing money, as opposed to being accused of printing money, the Fed drains cash out of the system to offset any increase (either of maturity or amount) of the term loans (Open Market Desk repo's or the new TAF collateral-backed loans), always misnomer'd as injections.
The Fed figures if its going to put money into the system, it'd better take some out elsewhere. When the Treasury pays off a maturing bond the Fed owns, the Fed "disappears" (see Catch-22) the cash.
The goal is that the monetary base, the only thing the Fed can control, stays flat or shows only a moderate and restrained growth.
Naturally, the response from the Financial Community is wails of hyperinflation, or wails of "Not enough!". Both remind me of our dog.
ac, this happened before the August cut in the Discount Rate.
To amplify psychodave's point, they did $5B in redemptions last Thu., $5B today and announced the $15B that you mentioned for next Thursday, thus totally $25B. That comfortably funds the the first $20B tranche of TAFs.
-K
"To amplify psychodave's point"
sk | Homepage | 12.13.07 - 12:59 pm
Thanks (once again) sk.
I failed to communicate that the Fed did similar redemptions well before the August credit crunch. Your itemization of the most recent redemptions is even better.
Mind the gap!