Posts filed under “Credit”

Open Thread: Rescue Me!

(Since I hate embedded sounds, you can play this if you choose:

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As we noted earlier today, the Fed, along with a slew of other Central Bankers, warmed up the whirlybirds and went out and about for a little joyride.
Contrary to some accounts, they were not responding mad pleadings of JC. Rather, the Central Bankers around the world responded to a sudden surge overnight of interest rates. When the US and Eurpean rates suddenly spiked — far above their Overnight Lending Rates — the central bankers are compelled to act.  Early Friday, markets had pushed the rate charged on overnight loans between banks to 6%. By day’s end the Bankers’ maneuver brought it down to 5.25%.

Here is a round up, courtesy of Real Time Economics, of their actions the past few days:

Federal Reserve
Thursday: $24 billion
Friday: $38 billion (tranches of $19 billion, $16 billion  and $3 billion)

European Central Bank
Thursday: €94.84 billion ($130 billion)
Friday: €61.05 billion ($83.56 billion)

The Bank of Canada
Friday: 1.64 billion Canadian dollars ($1.55 billion).

Bank of Japan
Friday: one trillion yen ($8.39 billion)

Swiss National Bank
Friday: two to three billion Swiss francs ($1.68-$2.51 billion) [estimate]

The Reserve Bank of Australia
Friday: 4.95 billion Australian dollars (US$4.18 billion)

The Monetary Authority of Singapore
Friday: 1.5 billion Singapore dollars (US$986.1 million)

The authorities in Malaysia, the Philippines and Indonesia intervened in foreign-exchange markets to support their currencies against the U.S. dollar.

Any thoughts as to how far this goes? Will the Central Bankers keep the liquidity infusion flowing? What’s the impact on Markets, the Economy, Risk appetites?

What say ye?


Central Banks React to Liquidity Crisis
WSJ, Real Time Economics Blog, August 10, 2007, 11:12 am

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Category: Credit, Currency, Derivatives, Federal Reserve, Markets, Psychology

Category: Credit, Derivatives, Psychology

Time to Warm Up The Helicopters?

Category: Credit, Derivatives, Federal Reserve, Psychology

Advice for Rich Uncles and Others . . .

Category: Credit, Derivatives, Investing, Markets

Open Thread: Bear Stearns

Category: Corporate Management, Credit, Derivatives, Finance, Psychology, Trading

A Short History of the Credit Boom & Bust

Category: Credit, Derivatives, Finance, Markets, Psychology, Real Estate

Notice to Loan Officers/Brokers

Category: Credit, Derivatives, Psychology, Real Estate

The “Chutzpah” of Bear Stearns

Category: Credit, Derivatives, Economy, Markets, Psychology

Understanding Credit’s Alphabet Soup

There were a couple of great graphics in the New York Times recently, explaining in some degree of detail, the machinations of the RMBS, CDO and CLO markets.

These are the packaged (and repackaged) holdings that are based upon the sub-prime mortgages that have been defaulting in such large numbers, and have been leading to hedge fund blow ups.

First up: todays front page article by Gretchen Morgenson: Mortgage Maze May Increase Foreclosures.



Graphic courtesy of NYTimes


Next up, the accompanying graphics to Floyd Norris’ The Loan Comes Due:


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Category: Credit, Data Analysis, Derivatives, Real Estate

Blaming the Retail Investor

Category: Credit, Derivatives, Financial Press, Investing, Markets, Psychology, Real Estate