On Dec 13, 2007, at 1:32 PM, raghu wrote:
On Dec 13, 2007 9:20 AM, Doug Henwood <[EMAIL PROTECTED]> wrote:
On Dec 13, 2007, at 11:55 AM, Charles Brown wrote:
Fed IS footing bill for lenders' crisis (that is, they will make us
pay
for it)
How?
By accepting junk collateral at the new auction, for one thing:
http://www.frbdiscountwindow.org/discountmargins.pdf
Specifically non-AAA CLO/CDOs at 85% par.
WS is screaming about that haircut. But in any case, say the Fed
takes a loss on this (which is unlikely, because the bank is still on
the hook and would be *very* reluctant to default on the Fed). Who
would pay for that exactly?
Doug
