'HYPER-HYPOTHECATION
With weak collateral rules and a level of leverage that would make Archimedes tremble, firms have been piling into re-hypothecation activity with startling abandon. A review of filings reveals a staggering level of activity in what may be the world’s largest ever credit bubble.
Engaging in hyper-hypothecation have been Goldman Sachs ($28.17 billion re-hypothecated in 2011), Canadian Imperial Bank of Commerce (re-pledged $72 billion in client assets), Royal Bank of Canada (re-pledged $53.8 billion of $126.7 billion available for re-pledging), Oppenheimer Holdings ($15.3 million), Credit Suisse (CHF 332 billion), Knight Capital Group ($1.17 billion),Interactive Brokers ($14.5 billion), Wells Fargo ($19.6 billion), JP Morgan($546.2 billion) and Morgan Stanley ($410 billion).
Nor is lending confined to between banks. Intra-bank re-hypothecation is also possible as evidenced by filings from Wells Fargo. According to disclosures from Wachovia Preferred Funding Corp, its parent, Wells Fargo, acts as collateral custodian and has the right to re-hypothecate and use around $170 million of assets posted as collateral...'
newsandinsight.thomsonreuters.com
.. before you go thinking they are all tender young maidens and going to stay that way -g- ... except for brokerage accts and two per cent promotion money on credit cards [which you really have to read and follow the rules to game correctly], i deal with credit unions as much as possible ... the premise of the thread was that relatively the canuck banks were better value, the thing is that back then they were on a roll, had some beauty for a while, but now it's a less-ugly contest
[edit] - more on same - Message 27811971 |
