Archive for September, 2008

The End of Wall Street

The start of a new Financial Order…?


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Global Equity Market

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Helicopter Ben has 250b left

Down from 800b, – last July.

Last July, the Fed had about $800 billion in government Treasurys in its vaults. Now, it’s around $480 billion, and about half of that already spoken for. It looks as if the Fed is running low on liquidity to fight the fire raging on Wall Street.


Huh, “The Fed’s wiggle room is only about $250 billion of unencumbered Treasurys,” wrote Ray Stone, principal at Stone & McCarthy Research, in a recent note to clients. That $250 billion could go quickly: $85 billion to AIG, potentially $100 billion or more to help Lehman Bros. liquidate, and who knows who’s next.

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An Amazing Letter

From Anthony Piszel, the CFO of Freddie Mac. In the letter Piszel tried to claim that there is nothing wrong with Freddie. He claimed that those that think Freddie will go under need to look away from “Freddie Mac’s fair-value balance sheet to ascertain our financial condition. Freddie Mac is a buy-and-hold investor- we invest in mortgages with the intent of holding them to maturity. So today’s mortgage valuations are less relevant a measure of our financial condition, especially given the highly subjective nature of these valuations in today’s market.”

In other words the market has been wrong to lower the value of Freddie Mac’s mortgage securities and we at Freddie Mac believe they deserve more value than they have right now and if they did our balance sheet would look fine so don’t look at our balance sheet to figure out the financial condition of our company, but instead listen to what we tell you.

Two days after this letter was published Freddie Mac accepted a takeover by the US government.

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Foreclosure Heat

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