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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: RonMerks who wrote (6750)	10/23/2007 5:47:23 PM
From: wsw1	Respond to of 50758

it's like creating a floor in a stock by putting a "big lot" on the bid side. sometimes it works... and sometimes it doesn't, i.e. when you get dumped on...

To: RonMerks who wrote (6750)	10/23/2007 5:58:46 PM
From: Sweet Ol	Respond to of 50758

Question on SIV bailout? Is there something fishy here, or am I misunderstanding it? You understand it pretty much the same way I see it. It looks like a way to postpone the day of reckoning - to give them a way to write the junk off over time instead of one big hickey. Best to all, JRH

To: RonMerks who wrote (6750)	10/23/2007 6:43:46 PM
From: rich evans	Respond to of 50758

I think your analysis is correct but is it bad? The paper's market value is a problem. But it has intrinsic real value based on the realestate security. So the banks are just trying to hold for investment and create liquidity for the SIVs. As the mortgages are dealt with gradually , the losses would be substantially less then the discount market value now prevailing. The real losses would be closer to 10% then the 50% discounts on a market valuation. So hold the paper as an investment and deal with the individual foreclosures necessary is not a bad thing to do and if this "conduit" can allow that , this is not necessarily bad for the public, the banks or the homeowners especially if homeprices turn around in the next few years. Rich

To: RonMerks who wrote (6750)	11/2/2007 10:53:57 PM
From: bluezuu	Respond to of 50758

Federal Reserve says super SIV requires less capital Fri Nov 2, 2007 5:25pm EDT WASHINGTON (Reuters) - Banks that back a proposed new multi-billion dollar investment fund that may purchase risky mortgage-related assets will need only one tenth of the capital they would need if they were to take the assets onto their own balance sheets, the Federal Reserve has said. Under Federal Reserve rules on capital requirements for banks, off balance sheet commitments require less capital. Encouraged by the U.S. Treasury Department, Citigroup, JP Morgan, and Bank of America have proposed setting up a special investment vehicle to either guarantee or buy U.S. mortgage-related assets in order to help dissipate some of the credit concerns that caused this summer's global liquidity crisis Promises to lend against assets transferred from a bank to the new fund, known as the Master Liquidity Enhancement Conduit, would qualify as a commitment needing less capital, the Fed said in a letter last week to Citigroup. "The credit conversion factor that would apply to the notional amount of the M-LEC liquidity facility would be 10 percent," wrote Norah Barger, the associate director of the Fed's Division of Banking Supervision and Regulation. "The effect of the letter is that assets placed in the super-SIV (technically termed M-LEC, or Master Liquidity Enhancement Conduit) would have a capital treatment that is 10 times more favorable than if the same assets were placed on the bank's balance sheet," Mike Mayo, an analyst with Deutsche Bank said in a note to clients. reuters.com