1) Large country pulling funds.
2) Sub-prime some how affecting money markets
3) Derivatives based on Money Market rates: crashing?"
If I could see it the Feds surly should have note this.
They had 9 months to do something.
They knoew the worlds money markets were having problems and THEY knoew the cause,
Sub-prime investments in money markets and they knew the bad loans were making the money markets il-liquid.
AND THEY DID NOTHING FOR 9 MONTHS....
SOME ONE NEED TO BE FIRED.
tHEY SAT ON THIS FOR 9 MONTHS AND DECLARED AN EMERGENCY TO PUSH LEGISLATION AT THE LAST MIN.
whores IN CONGRESS.
SERIES 7 AND 11
How does the sub-prime problem have an effect on credit avaiability?
Real Estate loans are bundled together as a security, and sold like bonds.
The Income from house payments produced the cash flow.
So these "bonds" backed by real estate provide the interest payments from
So far so good, nothing wrong with that.
Unless the loans are junk, as soon as we get massive defaults
the Interest on the RE bonds stops as home payments stop.
Now you have a Investment backed by real estate without income.
And as we all know Real Estate is il-liquid, you can't convert it to cash
in 15 min, kind of thing.
Well these Real Estate bonds found their way into Money Markets!
Now I'm not sure how that works, I expect deritavites.
But when these RE bonds quit payment and became Il-liquid
they crippled money markets, probally one of the worlds safest
and most liquid investments.
The money used to make loans are stored/ invested in money markets.
When the money markets coudn't be cashed because the RE bonds quit paying
interest/home payments, they couldn't be cashed our as they are il-liquid.
Now this probally would have worked just fine, except for sub-prime
sleaze, Bankers writing loans they know won't pay off, the barrowers
default, because the banks know they won't get stuck they sell them
to Freddie mac or Sallie may.
AND some other sleaze worked them into money markets. causing the
Seems the SEC didn;t notice the RE bonds in money markets,
and the Federal Reserve couldn't figure out 7 months ago RE bonds had got into
money markets, I did why didn't they? Where is Paul Volker when you need him?
The regulators need to get RE bonds to hell out of money markets.
I have no attempt to do this, maybe they hope buying up the RE bonds
will remove them for money narkets, get th e deritvites out of the money markets.
Regulators need to be replaced. And the Federa; reserve let this develop into
a distaster, and then came up with a poor soultion, and shifted risk on to the taxpaysr.
Banking lobbyiest did a great job buying the congress men.
Anybody know who the cingressmen are that accepted the banking lobbyist money and how much? HEADS SHOULD ROLL, AND THE BIGGEST PRISION TERMS IN HISTORY TO MATCH
THE BIGGEST BAIL OUT IN HISTORY.
i EXPECT SOME CONGRESSMEN WILL PROTECT THE BANKING CEOS FROM PRISION.