“the Federal Reserve’s creation of the primary credit dealer facility has provided a backup lending source mitigating the possibility of another collapse.”–March 27, 2008, Morningstar advisory
“Of course, even the most carefully crafted regulations cannot ensure that liquidity crises will not happen again. But, if moral hazard is effectively mitigated, and if financial institutions and investors draw appropriate lessons from the recent experience about the need for strong liquidity risk management practices, the frequency and severity of future crises should be significantly reduced.”—May 2008, “Liquidity Provision by the Federal Reserve,” Ben S. Bernanke
Every ‘monetary’ crisis has a scapegoat… Now which one told a lie to the government? Found one, a member of the Greedy5. Hell-o Martha.
Is a few hundred billion short trades a day a tad bit much to ask of your bank’s liquidity? Although JP Morgan would make an admirable Martha, fourwinds charts point out the possibility as not likely due to JP Morgan’s cozy relationships with the “government.” The FDIC seized WAMU and gave it away to JP Morgan for $1.9B with financing thrown in. JP Morgan recently bought Bear Stearns for $2 a share, March 2008. Goldman Sachs and Morgan Stanley, parented by JP Morgan & Co., were allowed bank holding status by the Federal Reserve on 9/21/08. Of note Mitsubishi UFJ Financial Group, Japan’s largest bank, took a $9 billion piece of equity in Morgan Stanley on 9/29/08.
Not to sit on a trend or anything but remember in 2006, “The Naked Shorts Still Got No Clothes?” April, 2008 — Private equity did a smart thing or an oops with Wamu?
October, 2008 Hedge fund losses in Lehman are in the millions of Google Links.
“J. P. Morgan is – HANDS DOWN – the largest derivatives player in the world with a book of 90 Trillion in notional value at March 31, 2008 – with 9% of the book composed of Credit Derivatives. That amounts to a cool 8.1 Trillion worth of Credit Derivatives. We know this from the Office of the Comptroller of the Currency’s Quarterly Derivatives Report – pg. 24–Hidden bailouts that go bump in the night
“When JPMorgan shut Lehman off from funds, Lehman “suffered an immediate liquidity crisis that could have been averted by any number of events, none of which transpired,”– bankruptcy filing documents, given to all of the Mother media, September 13 – October 4, 2008 .
June 20, 2006 “Five years after Enron, Culture of Greed is Back“
Cash Crunch Crisis caused by Lender?–October 4, 2008 Bloomberg Exclusive