I am NOT above mistakes...umm, but I don't believe I am mistaken here. Where does the reference above say that "anybody" can go to the Fed's windows? It is my understanding (and, yes, as hard as it is to believe, I am fallible ;-) ) I understand the above to mean that ONLY FDIC/FedRes aligned banks/cos. can go to the windows...including the secondary window. We are NOT talking about a "mom and pop" shop staying alive here! We are talking about a Corp. that needs about $500 Mil. to stay afloat for the next week or so - TO MEET PAYROLL!!! What - TAF, TALF, TLSF aren't enough???!!! Accessing the secondary window in years past would have been, umm, faux pas!!! TODAY?!?!?! - somebody is in REAL TROUBLE http://www.bos.frb.org/economic/banknote/bn2002/bn1202.htm See the stuff about "stigma" -gastropod
Secondary credit is available to depository institutions not eligible for primary credit. Secondary credit entails a higher level of administration. Secondary credit is subject to a higher level of lending administration than primary credit. Examples of appropriate uses of secondary credit include: Tight money markets or undue market volatility Addressing an overnight overdraft Meeting a need for backup funding, including a short-term liquidity demand Inability to obtain funding from normal sources To assist the primary regulator in prompt closure of a troubled institution. http://www.frbdiscountwindow.org/programs.cfm?hdrID=14
Don't get in an uproar. You don't have to lecture me about the stigma of going to the discount window. Without saying more than I want, I will simply say that I know quite a bit about that. Quoting from my quote, note the following: So, it says that institutions not eligible for the primary discount window can borrow from the secondary one. The really small guys go to the third one. So, this is not a really small guy, just someone not eligible for the primary window. What I was trying to hint at is that it wouldn't be a Fed member, but that doesn't necessarily mean it would be a small player. The GE guess was a pretty good one along those lines. Unless something more substantive comes out about this, we'll all be guessing. I'm pretty sure whoever this is will be able to sweep it under the rug, no pun intended, and we'll never find out.
ROFLMAO - hey, man - I get soo little chance to scoop the "big boys" that any chance I can get...I take ;-) No offense intended!!! I actually think this issue bares some attendance/watching. -The stomach with feet - gastropod!
Flagstar ain't lookin' so grand... http://www.elitetrader.com/vb/showthread.php?threadid=173216 Then again, A LOT of banks are looking way less than grand.
CIT had $75b in liabilities and it seems its failure would not be a big deal. $500m in liquidity needs is nothing