Investment Firms Tap Fed for Billions

uscitizen

uscitizen

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Investment Firms Tap Fed for Billions

Friday March 21, 5:26 AM EDT

WASHINGTON (AP) — Big Wall Street investment companies are taking advantage of the Federal Reserve's unprecedented offer to secure emergency loans, the central bank reported Thursday.

The lending is part of a major effort by the Fed to help a financial system in danger of freezing.

Those large firms averaged $13.4 billion in daily borrowing over the past week from the new lending facility. The report does not identify the borrowers.

The Fed, in a bold move Sunday, agreed for the first time to let big investment houses get emergency loans directly from the central bank. This mechanism, similar to one available for commercial banks for years, got under way Monday and will continue for at least six months. It was the broadest use of the Fed's lending authority since the 1930s.

Goldman Sachs, Lehman Brothers and Morgan Stanley said Wednesday they had begun to test the new lending mechanism.

On Wednesday alone, lending reached $28.8 billion, according to the Fed report.

http://finance.myway.com/jsp/nw/nwdt_rt.jsp?section=news&feed=ap&src=601&news_id=ap-d8vho0100&date=20080321
 
I'm going to shock the turbo-libs with this one.
This is crazy, it's a Bush extention (or what ever good ole boy passed it) of the country club board room circle jerk with the overpaid CEO's.
I'm for some radical alteration of the 2 America's (board room vs city council)
 
This is my favorite part:

Investment houses can put up a range of collateral, including investment-grade mortgage backed securities.
Click to expand...


"Mortgage-backed securities" as collateral? They might as well put up a steaming pile of dog shit as collateral since it has about the same value.
 
Investment banks should have access to the discount window the same way commecial banks do. Otherwise you bail out the commercial banks at the investment banks expense. They repealed Glass Stegall in 99' which allowed Investment banks and Commercial banks to consolidate and many blame this for a major reason for the credit crunch and opening the discount window to investment banks should have been allowed then in 99'.
 
Obfuscate said:
Investment banks should have access to the discount window the same way commecial banks do. Otherwise you bail out the commercial banks at the investment banks expense. They repealed Glass Stegall in 99' which allowed Investment banks and Commercial banks to consolidate and many blame this for a major reason for the credit crunch and opening the discount window to investment banks should have been allowed then in 99'.
Click to expand...

well in that case, so should individuals. We all should get it. We can start businesses without having to jump through the hurdles of elitists who obviously can't even handle their own shit. I have to prove to the bank that I"m responsible? They live in glass houses.
 
AssHatZombie said:
well in that case, so should individuals. We all should get it. We can start businesses without having to jump through the hurdles of elitists who obviously can't even handle their own shit. I have to prove to the bank that I"m responsible? They live in glass houses.
Click to expand...

I understand what you say, there is a good argument that Commercial and Investment banks should fail on there own terms, the act was put in place due to the bank runs and failures that started the Great Depression. My point is with the repeal of Glass Steagall it makes sense that both would be able to use the discount window. To those against the Fed though don't believe a discount window should exsist.
 
Dungheap said:
This is my favorite part:




"Mortgage-backed securities" as collateral? They might as well put up a steaming pile of dog shit as collateral since it has about the same value.
Click to expand...

I agree that this is bullshit. Even though they are only accepting "investment grade" MBS (which means BBB quality or better). The problem is that many of the MBS like the CDOs and SIVs that went bad were rated investment grade.

This is an attempt by the government to hide this bad debt in the national debt. Write it off and let future generations pay for the greed of todays lenders and borrowers.

This bullshit has to stop.
 
uscitizen said:
And now the feds are beffing the UAE and such not to use our debt they hold against us politically.
Click to expand...

What? Just how would the UAE hold it against us? They do not hold a significant amount of US debt that I am aware of.

Japan and China own about half of the US debt in foreign hands. US debt held by foreign countries (and individuals/corps to a far lesser degree) is about 25% of total US debt and about 50% of total public debt (rough numbers).

With the declining value of the dollar, the debt held by foreigners is actually decreasing in real terms.
 
Obfuscate said:
Investment banks should have access to the discount window the same way commecial banks do. Otherwise you bail out the commercial banks at the investment banks expense. They repealed Glass Stegall in 99' which allowed Investment banks and Commercial banks to consolidate and many blame this for a major reason for the credit crunch and opening the discount window to investment banks should have been allowed then in 99'.
Click to expand...

The repealment of Glass Steagall began back in 92 under Bush. Then it was slowly hacked apart in the 1990s. The current Bush and Rep Congress extended the provisions that eliminated Glass Steagall in 2003 (could be wrong on the year).

But you are correct. It was the undoing of Glass Steagall and the championing of "more homeowners than ever before" by Bush, Clinton and Bush (along with Congress during that time) that led to this financial mess we are in today.
 
Obfuscate said:
I understand what you say, there is a good argument that Commercial and Investment banks should fail on there own terms, the act was put in place due to the bank runs and failures that started the Great Depression. My point is with the repeal of Glass Steagall it makes sense that both would be able to use the discount window. To those against the Fed though don't believe a discount window should exsist.
Click to expand...

True enough.

I'm against fiat money. So I just really don't fit in at all.
 
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