The countryâs three biggest banks have reached agreement on the structure of a backup fund of at least $75 billion to help stabilize credit markets, a person involved in the discussions said yesterday, ending nearly two months of complicated negotiations against a worsening economic backdrop. Officials from Bank of America, Citigroup and JPMorgan Chase reached agreement late Friday, settling on a more simplified structure than had been proposed, said this person, granted anonymity because he was not authorized to talk for the group. Bank participants, money market investors and even some managers of the troubled investment vehicles that would benefit most had considered previous versions of the fund to be infeasible, casting doubt over a final plan. Discussions had been taking place since early fall, when the Treasury Department convened a meeting. Now, the proposed fund could begin operating by the end of December, this person said. The banks could begin asking roughly 60 financial institutions to contribute to the fund by Friday or early next week. âWe cleared all the big hurdles,â this person said. âWe agreed to a much simpler structure that we think can get done rather than optimize it for everyone.â Officials from the banks and the Treasury Department declined to comment or did not return calls. http://www.nytimes.com/2007/11/11/business/11bank.html?_r=1&ref=business&oref=slogin Don´t know whether it is good or bad news...
As long as the rating agencies won't get involved and scrutinize, it will have more impact than Bernanke lowering rates
As for the long run, everyone better hope all the skeletons are out of the closet and foreign investment will pick up.
While I was reading the NYT headlines, another piece of news "occured" : HSBC to reveal new $1bn sub-prime hit HSBC will this week reveal a further $1bn (£475m) of bad debts stemming from its American mortgage business, amid mounting fears that the full impact of the global credit crunch has yet to wash up on British shores. http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/11/11/cnhsbc111.xml never-ending story...
Soros sees "serious" economic correction Tue Nov 6, 2007 2:38 AM GMT By Walter Brandimarte NEW YORK (Reuters) - Billionaire investor George Soros forecast on Monday that the U.S. economy is "on the verge of a very serious economic correction" after decades of overspending. "We have borrowed an awful lot of money and now the bill is coming to us," he said during a lecture at the New York University, also adding that the war on terror "has thrown America out of the rails." Asked whether a recession was inevitable, Soros said: "I think we are definitely in for a slowdown that I think will be a bigger slowdown than (Fed Chairman Ben) Bernanke is seeing." Famous for his speculative attack on the Bank of England that made him more than $1 billion, Soros declined to nominate which currencies are more vulnerable currently. He also declined to comment specifically on the dollar. "I know exactly where the currencies are going to but I'm not going to tell that to you," he told the audience.
Launching the Super SIV - Getting the Big Things Right Call it an 80% solution. Call it what you will. Getting a pooled liquidity vehicle up and running - now - is far more important than waiting for consensus via "group grope" and maybe never getting it off the ground. The intended benefits of the Super SIV (or M-LEC) are pretty straightforward, but the optimization process that was being used to try and elicit support for the vehicle just wasn't working. The sheer scale and complexity of the monster vehicle was causing a form of "analysis paralysis," with each and every constituency weighing in as to what they needed in order to participate. Instead, and likely with the prodding of Treasury, they settled on a more simple, straight-forward answer in order to get moving and to begin enjoying some of the benefits of its operation. From today's New York Times: http://www.informationarbitrage.com/2007/11/launching-the-s.html
"The countryâs three biggest banks have reached agreement on the structure of a backup fund of at least $75 billion to help stabilize credit markets, a person involved in the discussions said yesterday, ending nearly two months of complicated negotiations against a worsening economic backdrop." Soooo...... That means the Banks who are in deep doo-doo in the subprimes are putting up money to shore themselves up? Wait - I just took money out of my left pocket and put it in my right pocket and...by gum....it REALLY WORKS!! I feel a lot better now....