Fed Pumps $41B Into US Financial System

[Eugene]

That’s not what the World Bank/IMF recommends. According to them, it’s always better to flush out the inneficiencies and corruption. Let the bad apples rot instead of putting them on ice.

I’m not aware of these World Bank/IMF recommendations. After what their recommendations did to Russia in the 90’s, I’m not inclined to put much weight into their recommendations, anyway.

Bad apples will rot. Healthy levels of inflation aren’t going to bring back the subprime MBS market and aren’t going to do much to help homebuliders. The only thing that would do that is hyperinflation (double digit growth in per capita incomes year after year), that’s not what I’m advocating and that’s not what we’re getting from the Fed. Do we want Home Depot and Starbucks to go down with Countrywide and Lennar because their unemployed potential customers are forced to cut down on discretionary spending, or do we want to spread just enough money around to keep Starbucks afloat while Countrywide and Lennar declare bankruptcy?

[Eugene]

That’s not what the World Bank/IMF recommends. According to them, it’s always better to flush out the inneficiencies and corruption. Let the bad apples rot instead of putting them on ice.

I’m not aware of these World Bank/IMF recommendations. After what their recommendations did to Russia in the 90’s, I’m not inclined to put much weight into their recommendations, anyway.

Bad apples will rot. Healthy levels of inflation aren’t going to bring back the subprime MBS market and aren’t going to do much to help homebuliders. The only thing that would do that is hyperinflation (double digit growth in per capita incomes year after year), that’s not what I’m advocating and that’s not what we’re getting from the Fed. Do we want Home Depot and Starbucks to go down with Countrywide and Lennar because their unemployed potential customers are forced to cut down on discretionary spending, or do we want to spread just enough money around to keep Starbucks afloat while Countrywide and Lennar declare bankruptcy?

[Arraya]

Bond Insurers Are Going Bankrupt Now

November 3, 2007

Elaine Meinel Supkis

Once again, stocks rose on FAKE news. The employment numbers are pure fiction. If inflation statistics are science fiction then the employment figures belong in the ‘Harry Potter Magic Books’ section of the library. Tier 3 assets which are those horrid little ABX-He babies, must be valued in real terms by January so I expect a flood of red ink to pour out of many slit wrists on Wall Street soon. And three major risk-insurers of these speculators and wild cat lenders are now going under rapidly. Time to visit not only these three but Goldman Sachs and Citigroup. The Saudis are getting razor-wielding mad over the weak dollar. And a news story just in: stock analyst, Meredith Whitney is blamed for all the bad news and people are sending her death threats! Wow.
From Reuters:

Credit derivative traders are valuing bond insurers Ambac Financial Group (ABK.N: Quote, Profile , Research) and MBIA Inc (MBI.N: Quote, Profile , Research) as deep junk credits, while their stock prices have also plunged on concerns the companies may need more capital to shore up their high ratings.
Credit default swaps on Ambac have surged to around 620 basis points, or $620,000 per year for five years to insure $10 million in debt, from 185 basis points a month ago, according to data provided by CMA DataVision.

Its shares have tumbled nearly 60 percent since the beginning of October, 41 percent this week alone.

Ambac and MBIA both reported third-quarter losses last week caused by their writing down the market value of their respective credit derivative portfolios, which are used to insure assets including residential mortgages against default.

This is a major failure. This is deep beneath the surface of the waters, like the Titanic ripping its hull underwater, these organizations we will visit tonight are similar: they are the hull of the banking system. They are the ones who are supposed to protect the banking system from failure and they are now failing, themselves. This is serious.

http://elainemeinelsupkis.typepad.com/money_matters/2007/11/elaine-meinel-2.html

[Arraya]

Bond Insurers Are Going Bankrupt Now

November 3, 2007

Elaine Meinel Supkis

Once again, stocks rose on FAKE news. The employment numbers are pure fiction. If inflation statistics are science fiction then the employment figures belong in the ‘Harry Potter Magic Books’ section of the library. Tier 3 assets which are those horrid little ABX-He babies, must be valued in real terms by January so I expect a flood of red ink to pour out of many slit wrists on Wall Street soon. And three major risk-insurers of these speculators and wild cat lenders are now going under rapidly. Time to visit not only these three but Goldman Sachs and Citigroup. The Saudis are getting razor-wielding mad over the weak dollar. And a news story just in: stock analyst, Meredith Whitney is blamed for all the bad news and people are sending her death threats! Wow.
From Reuters:

Credit derivative traders are valuing bond insurers Ambac Financial Group (ABK.N: Quote, Profile , Research) and MBIA Inc (MBI.N: Quote, Profile , Research) as deep junk credits, while their stock prices have also plunged on concerns the companies may need more capital to shore up their high ratings.
Credit default swaps on Ambac have surged to around 620 basis points, or $620,000 per year for five years to insure $10 million in debt, from 185 basis points a month ago, according to data provided by CMA DataVision.

Its shares have tumbled nearly 60 percent since the beginning of October, 41 percent this week alone.

Ambac and MBIA both reported third-quarter losses last week caused by their writing down the market value of their respective credit derivative portfolios, which are used to insure assets including residential mortgages against default.

This is a major failure. This is deep beneath the surface of the waters, like the Titanic ripping its hull underwater, these organizations we will visit tonight are similar: they are the hull of the banking system. They are the ones who are supposed to protect the banking system from failure and they are now failing, themselves. This is serious.

http://elainemeinelsupkis.typepad.com/money_matters/2007/11/elaine-meinel-2.html

[Arraya]

Bond Insurers Are Going Bankrupt Now

November 3, 2007

Elaine Meinel Supkis

Once again, stocks rose on FAKE news. The employment numbers are pure fiction. If inflation statistics are science fiction then the employment figures belong in the ‘Harry Potter Magic Books’ section of the library. Tier 3 assets which are those horrid little ABX-He babies, must be valued in real terms by January so I expect a flood of red ink to pour out of many slit wrists on Wall Street soon. And three major risk-insurers of these speculators and wild cat lenders are now going under rapidly. Time to visit not only these three but Goldman Sachs and Citigroup. The Saudis are getting razor-wielding mad over the weak dollar. And a news story just in: stock analyst, Meredith Whitney is blamed for all the bad news and people are sending her death threats! Wow.
From Reuters:

Credit derivative traders are valuing bond insurers Ambac Financial Group (ABK.N: Quote, Profile , Research) and MBIA Inc (MBI.N: Quote, Profile , Research) as deep junk credits, while their stock prices have also plunged on concerns the companies may need more capital to shore up their high ratings.
Credit default swaps on Ambac have surged to around 620 basis points, or $620,000 per year for five years to insure $10 million in debt, from 185 basis points a month ago, according to data provided by CMA DataVision.

Its shares have tumbled nearly 60 percent since the beginning of October, 41 percent this week alone.

Ambac and MBIA both reported third-quarter losses last week caused by their writing down the market value of their respective credit derivative portfolios, which are used to insure assets including residential mortgages against default.

This is a major failure. This is deep beneath the surface of the waters, like the Titanic ripping its hull underwater, these organizations we will visit tonight are similar: they are the hull of the banking system. They are the ones who are supposed to protect the banking system from failure and they are now failing, themselves. This is serious.

http://elainemeinelsupkis.typepad.com/money_matters/2007/11/elaine-meinel-2.html

[Arraya]

Bond Insurers Are Going Bankrupt Now

November 3, 2007

Elaine Meinel Supkis

Once again, stocks rose on FAKE news. The employment numbers are pure fiction. If inflation statistics are science fiction then the employment figures belong in the ‘Harry Potter Magic Books’ section of the library. Tier 3 assets which are those horrid little ABX-He babies, must be valued in real terms by January so I expect a flood of red ink to pour out of many slit wrists on Wall Street soon. And three major risk-insurers of these speculators and wild cat lenders are now going under rapidly. Time to visit not only these three but Goldman Sachs and Citigroup. The Saudis are getting razor-wielding mad over the weak dollar. And a news story just in: stock analyst, Meredith Whitney is blamed for all the bad news and people are sending her death threats! Wow.
From Reuters:

Credit derivative traders are valuing bond insurers Ambac Financial Group (ABK.N: Quote, Profile , Research) and MBIA Inc (MBI.N: Quote, Profile , Research) as deep junk credits, while their stock prices have also plunged on concerns the companies may need more capital to shore up their high ratings.
Credit default swaps on Ambac have surged to around 620 basis points, or $620,000 per year for five years to insure $10 million in debt, from 185 basis points a month ago, according to data provided by CMA DataVision.

Its shares have tumbled nearly 60 percent since the beginning of October, 41 percent this week alone.

Ambac and MBIA both reported third-quarter losses last week caused by their writing down the market value of their respective credit derivative portfolios, which are used to insure assets including residential mortgages against default.

This is a major failure. This is deep beneath the surface of the waters, like the Titanic ripping its hull underwater, these organizations we will visit tonight are similar: they are the hull of the banking system. They are the ones who are supposed to protect the banking system from failure and they are now failing, themselves. This is serious.

http://elainemeinelsupkis.typepad.com/money_matters/2007/11/elaine-meinel-2.html

[bsrsharma]

US banks borrow $50bn via new Fed facility

“The banks are increasingly giving the Fed the garbage collateral nobody else wants to take . . . [this] suggests a perilous condition for America’s banking system.”

http://www.ft.com/cms/s/0/66db756a-de5d-11dc-9de3-0000779fd2ac.html?nclick_check=1

[bsrsharma]

US banks borrow $50bn via new Fed facility

“The banks are increasingly giving the Fed the garbage collateral nobody else wants to take . . . [this] suggests a perilous condition for America’s banking system.”

http://www.ft.com/cms/s/0/66db756a-de5d-11dc-9de3-0000779fd2ac.html?nclick_check=1

[bsrsharma]

US banks borrow $50bn via new Fed facility

“The banks are increasingly giving the Fed the garbage collateral nobody else wants to take . . . [this] suggests a perilous condition for America’s banking system.”

http://www.ft.com/cms/s/0/66db756a-de5d-11dc-9de3-0000779fd2ac.html?nclick_check=1

[bsrsharma]

US banks borrow $50bn via new Fed facility

“The banks are increasingly giving the Fed the garbage collateral nobody else wants to take . . . [this] suggests a perilous condition for America’s banking system.”

http://www.ft.com/cms/s/0/66db756a-de5d-11dc-9de3-0000779fd2ac.html?nclick_check=1

[bsrsharma]

US banks borrow $50bn via new Fed facility

“The banks are increasingly giving the Fed the garbage collateral nobody else wants to take . . . [this] suggests a perilous condition for America’s banking system.”

http://www.ft.com/cms/s/0/66db756a-de5d-11dc-9de3-0000779fd2ac.html?nclick_check=1

[HereWeGo]

Actually, it’s $60B as of Feb 13.

I know this develpment is supposed to be benign and all, but here is the historical data.

[HereWeGo]

Actually, it’s $60B as of Feb 13.

I know this develpment is supposed to be benign and all, but here is the historical data.

[HereWeGo]

Actually, it’s $60B as of Feb 13.

I know this develpment is supposed to be benign and all, but here is the historical data.

[HereWeGo]

Actually, it’s $60B as of Feb 13.

I know this develpment is supposed to be benign and all, but here is the historical data.

[Author]

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