dagblog - Comments for "Foreign Banks Tapped Fed's Lifeline"

Well, they're also huge in

Michael Maiello — Sat, 02 Apr 2011 01:22:57 +0000

In reply to Why or why does Deutsche Bank

Well, they're also huge in commodities speculation and are messing with your prices at the grocery store. They probably trade douches too.

Why or why does Deutsche Bank

cmaukonen — Sat, 02 Apr 2011 00:34:09 +0000

In reply to This also happened,

Why or why does Deutsche Bank remind me of douchebag ?

This also happened,

Michael Maiello — Fri, 01 Apr 2011 22:33:57 +0000

In reply to Foreign Banks Tapped Fed's Lifeline

This also happened, indirectly, through the AIG bailout. I've long believed, but have never been able to prove, that the reason AIG's counterparties got 100 cents on the dollar is that Deutsche Bank would have failed without the rescue and the Fed didn't want to be put in the position of trying to bail out Deutsche (which, by its charter, it can) and the Fed knew that the European Central Bank did not have the authority to do it.

'Bernanke provided billions

we are stardust — Fri, 01 Apr 2011 21:13:19 +0000

In reply to Foreign Banks Tapped Fed's Lifeline

'Bernanke provided billions in loans to Gadaffi':

http://www.washingtonsblog.com/2011/04/bernanke-provide-billions-in-loans-to.html

Yeah, guess it does. By

EmmaZahn — Fri, 01 Apr 2011 19:28:47 +0000

In reply to HA...Primary Dealer's List.

Yeah, guess it does. By comparison though drug cartels' money is merely crumbs.

BTW, your Bloomberg article has more links at Memeorandum than Krugman's

HA...Primary Dealer's List.

cmaukonen — Fri, 01 Apr 2011 18:49:53 +0000

In reply to Interesting and disingenuous.

HA...Primary Dealer's List. Sounds kind of like a drug bust, don't it.

So this story ties back to

EmmaZahn — Fri, 01 Apr 2011 18:45:00 +0000

In reply to The NYT Business section

So this story ties back to that lawsuit. That makes the Bloomberg piece more interesting and confusing. Who is its targeted reader?

As for the Fed's loan to Dexia: it is really quite possible that some of Dexia's own money may have been tied up in the Lehman mess or the frozen money market of late 2008 making the loan a reasonable thing to do. Maybe someday soon we will know for sure.

The NYT Business section

artappraiser — Fri, 01 Apr 2011 18:13:50 +0000

In reply to Interesting and disingenuous.

The NYT Business section coverage of this docudump is quite different, the European issue is addressed but not stressed as the only story therein:

The Fed’s Crisis Lending: A Billion Here, a Thousand There
by Binyamin Appelbaum and Jo Craven McGinty, March 31

WASHINGTON — The Federal Reserve’s huge lending programs, which saved Wall Street in the fall of 2008, also benefited a wide range of other financial companies, including community banks, credit unions and foreign banks, according to documents released by the central bank on Thursday.

Hundreds of small banks borrowed modest amounts of cash in 2008 and 2009, ranging from $1,000 to several million dollars, from an emergency loan program known as the discount window.

The Fed also used the discount window to make dozens of loans, often exceeding several billion dollars at a time, to the United States Central Federal Credit Union, helping to prevent a collapse that would have harmed hundreds of smaller credit unions. And the Fed helped to save some of the largest banks in Europe by pumping desperately needed dollars into their American subsidiaries. In fact, the biggest borrower from the Fed program was Dexia, a French-Belgian bank that frequently held more than $30 billion in outstanding loans from the program from late 2008 to early 2009.

The story of the Fed’s efforts to rescue giant banks like Merrill Lynch, Citigroup and Washington Mutual from the consequences of reckless lending and investments is already well known. The central bank released detailed information in December about the emergency programs it created to pump billions of dollars into those banks.

But the Fed fought long and hard to preserve the secrecy of transactions at the discount window, its oldest and most inclusive lending program. The grudging release of the data Thursday, in a format that impeded analysis, came only after a series of federal courts ruled in favor of lawsuits brought by Bloomberg News and Fox News.

The long list of borrowers, provided in the form of a daily loan register, gives a striking impression of a crisis spreading to every last corner of the financial system.

By late October 2008, the volume of outstanding loans topped $100 billion, with several dozen banks borrowing each day.

Some banks borrowed minimal amounts to test the process in case things got worse. For example, First City Bank in Fort Walton Beach, Fla., borrowed just $1,000 in October 2008 and repaid the money the next day....

Though they do play it up with this chart attached to the article:

Interesting and disingenuous.

EmmaZahn — Fri, 01 Apr 2011 17:21:20 +0000

In reply to Foreign Banks Tapped Fed's Lifeline

Interesting and disingenuous. In a Bloomberg article about the Fed, foreign banks and bailouts not one mention of the Fed's Primary Dealers, the approved counterparties for open market operations. Currently they are:

BNP Paribas Securities Corp.
Barclays Capital Inc.
Cantor Fitzgerald & Co.
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Daiwa Capital Markets America Inc.
Deutsche Bank Securities Inc.
Goldman, Sachs & Co.
HSBC Securities (USA) Inc.
Jefferies & Company, Inc.
J.P. Morgan Securities LLC
Merrill Lynch, Pierce, Fenner & Smith Incorporated
MF Global Inc.
Mizuho Securities USA Inc.
Morgan Stanley & Co. Incorporated
Nomura Securities International, Inc.
RBC Capital Markets, LLC
RBS Securities Inc.
SG Americas Securities, LLC
UBS Securities LLC.

Note the list includes a few foreign banks. It also once included some other more familiar names: Countrywide, Bear Stearns, Lehman, Merrill Lynch.

Bloomberg knows about primary dealers. They regularly identify news sources as working for one. That is what makes the article both interesting and disingenuous. Bloomberg is a great place to watch people/firms vie for investment dollars or promote trends in an open forum. Thanks for the link.