Maiden Lane lll

Does anyone have further details on this?

According to Earth Times :

On November 10, 2008, AIG and the FRBNY established Maiden Lane III, a financing entity, to purchase the securities underlying certain CDS contracts from the counterparties to such contracts, allowing the cancellation of the contracts. Attachment B lists payments made by Maiden Lane III to such counterparties.



So it looks like it's a special investment vehicle to buy CDO's that AIG wrote CDS's on, alleviating the underwriting stress on AIG of them.

My question is: are they being bought at face value, or at current market???? I'd think the CDO's can decline significantly in value without triggering a "credit event" that would allow a claim on the CDS??

thoughts?

 

Per AP:

"The money went to banks to cover their losses on complex mortgage investments, as well as for collateral needed for other transactions."

sounds more and more like a euro bank bailout. Initially I thought it was all margin collateral, but I am beginning to doubt it...

 

Maiden Lane I, II, & III are all underwater. Read the Federal Reserve Balance Sheet.

 

'Maiden Lane' sounds very ominous.

 

probably named after Maiden Lane, a street down in the financial district here in NYC

 

ha nevermind just realized that the Fed Reserve is on that street forgot.

 

Elm Street would have been a better name. As in "Nightmare on Elm Street"

 

Thanks. I didn't know that or that Bernanke's crew hung out on Maiden Lane.

 

BiLoSellHi = inks2002??

 

lol ..i live on Maiden Lane .. and yep ..i look right at that fed bldg ..