“Late last week, Sanford Bernstein analyst Brad Hintz wrote that he doesn’t believe Lehman will be like Bear Stearns–collapsed by rumors of illiquidity–because Lehman has raised $10 billion in the past two and a half months and has the backing of the Federal Reserve’s Primary Dealer Credit Facility.”–“Lehman Can Avoid A Sale, Here’s How“, July 2008
So again, we must ask what has really happened? Isn’t the real problem the Fed Reserve and the fact that JP Morgan and Lehman’s CEO’s sit on that very same board? And again, it is not believable that JP Morgan would do something to harm its dear banking bros. So really, what happened?
What is the Federal Reserve’s Primary Dealer Credit Facility?
In a statement that is the ultimate in bald and conclusory, March 16, 2008:
“The Federal Reserve has announced that the Federal Reserve Bank of New York has been granted the authority to establish a Primary Dealer Credit Facility (PDCF). This facility is intended to improve the ability of primary dealers to provide financing to participants in securitization markets and promote the orderly functioning of financial markets more generally. “–Federal Reserve Bank of New York