FED/BIG BANK NEWS that PISSES ME OFF!

Posted on April 9th, 2008 in Daily Mortgage/Housing News - The Real Story

Borrowing to support
and grow a business is one thing but borrowing to support or grow your stock
price is another.
– Best, Mr Mortgage
 
1) US Rep Raises
Concerns About Discount Window Abuses
Last update: 4/9 1:43:00
PM By Michael R. Crittenden Of DOW JONES NEWSWIRES

WASHINGTON (Dow
Jones)–Investment banks may be abusing the money they are borrowing from the
Federal Reserve’s discount window in order to issue dividends, a top House
Democrat said Wednesday. Rep. Paul Kanjorski, D-Penn., the chairman of the
House subcommittee with oversight over the capital markets, raised the concern
during a hearing Wednesday. He said a hedge fund manager suggested in a recent
meeting that large banks may be borrowing billions of dollars in funds made
available by the central bank in order to benefit their shareholders. "I
myself will be incensed if after going to the rescue of these institutions there
are those types of abuses occurring," Kanjorski said. "Particularly I’ll be
incensed if the Federal Reserve hasn’t marched up here with emergency sirens
saying there’s something happening that shouldn’t happen." Federal Reserve
Gov. Randall Kroszner said he was unaware of any type of abuses, and that any
such actions wouldn’t be tolerated. He stressed that the funds have only been
made available to a "limited number of institutions with which we have had a
long-standing relationship." Still, Kroszner suggested Congress might want to
pass legislation creating standards for the use of money borrowed through the
Federal Reserve’s lending facility. "It is going to be an issue going forward
that Congress will need to consider whether there will be additional regulatory
authority needed if this facility were to continue," Kroszner said. -By
Michael R. Crittenden, Dow Jones Newswires; 202-862-9273;

 
2) Fed
to lend additional $50 Bil in UST to Primary’s for 28-days-
 
Have to stay
ahead of demand I suppose. Funny, things like this pop up more often when stocks
are going down.
http://www.newyorkfed.org/markets/tslf/termseclending.cfm

I
guess the Fed is trying to stay ahead of the curve in here…why is it
when stocks get weak, the Fed perks up. What is their true mission
anyway. To fight inflation or fight the natural gyrations of the stock
market?  – Best, Mr Mortgage


2 Responses to “FED/BIG BANK NEWS that PISSES ME OFF!”

  1. what does he mean “if this facility were to continue”?

    They’ll shut it down once the crisis is over, right????

  2. No way. Why should they ?
    Perpetual credit and money machine.
    It’s too much fun.

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