Are those the blades of the 'copter Heliben whirring I hear?

[blazespinnaker]

http://www.bloomberg.com/apps/news?p...5Do&refer=home

May 2 (Bloomberg) -- A month after the Federal Reserve rescued Bear Stearns Cos. from bankruptcy, Chairman Ben S. Bernanke got an S.O.S. from Congress.

There is ``a potential crisis in the student-loan market'' requiring ``similar bold action,'' Chairman Christopher Dodd of Connecticut and six other Democrats wrote Bernanke. They want the Fed to swap Treasury notes for bonds backed by student loans. In a separate letter, Pennsylvania Democratic Representative Paul Kanjorski and 31 House members said they want Bernanke to channel money directly to education-finance firms.

Student loans are just the start. Former Fed officials and other Fed-watchers say that Bernanke's actions in saving Bear Stearns will expose the central bank to continuing pressure to use its $889 billion balance sheet to prop up companies or entire industries deemed important by politicians. The Fed satisfied Dodd's request today, expanding the swaps to include securities backed by student debt.

``It is appalling where we are right now,'' former St. Louis Fed President William Poole, who retired in March, said in an interview. The Fed has introduced ``a backstop for the entire financial system.''

Wow .. those are pretty strong words from a very recent voting board member.

[GRG55]

Re: Are those the blades of the 'copter Heliben whirring I hear?

http://www.bloomberg.com/apps/news?p...5Do&refer=home

May 2 (Bloomberg) -- A month after the Federal Reserve rescued Bear Stearns Cos. from bankruptcy, Chairman Ben S. Bernanke got an S.O.S. from Congress.

There is ``a potential crisis in the student-loan market'' requiring ``similar bold action,'' Chairman Christopher Dodd of Connecticut and six other Democrats wrote Bernanke. They want the Fed to swap Treasury notes for bonds backed by student loans. In a separate letter, Pennsylvania Democratic Representative Paul Kanjorski and 31 House members said they want Bernanke to channel money directly to education-finance firms.

Student loans are just the start. Former Fed officials and other Fed-watchers say that Bernanke's actions in saving Bear Stearns will expose the central bank to continuing pressure to use its $889 billion balance sheet to prop up companies or entire industries deemed important by politicians. The Fed satisfied Dodd's request today, expanding the swaps to include securities backed by student debt.

``It is appalling where we are right now,'' former St. Louis Fed President William Poole, who retired in March, said in an interview. The Fed has introduced ``a backstop for the entire financial system.''

Wow .. those are pretty strong words from a very recent voting chairman.

Would seem Poole's timing to retire from the Fed was nearly as good as Greenspan's timing...:rolleyes:

The video of Paul Volker's recent address to the Economic Club of NY sez it all.

[FRED]

Re: Are those the blades of the 'copter Heliben whirring I hear?

Would seem Poole's timing to retire from the Fed was nearly as good as Greenspan's timing...:rolleyes:

The video of Paul Volker's recent address to the Economic Club of NY sez it all.

Just a matter of time, then, until the CLOs that produced the debt to fund the LBO bubble are accepted by the Fed as collateral for short term loans.

Any guesses when that happens? By the end of this year?

[GRG55]

Re: Are those the blades of the 'copter Heliben whirring I hear?

Just a matter of time, then, until the CLOs that produced the debt to fund the LBO bubble are accepted by the Fed as collateral for short term loans.

Any guesses when that happens? By the end of this year?

Might they not have already had to accept CLOs as part of the Bear Stearns bail-out?

And it won't stop there either. The problem with hand grenades going off continually is one of them eventually risks igniting the entire arsenal. Note it's AAAs tranches under review today...

S&P Downgrades, Reviews $41 Billion of Alt-A Bonds

By Jody Shenn
April 29 (Bloomberg) -- Standard & Poor's downgraded or put on review ratings on $41 billion of debt backed by Alt-A home loans, citing a jump in defaults since the beginning of the year.

Ratings on 2,183 classes of securities created in 2006 were lowered, according to a statement today from the New York-based unit of McGraw-Hill Cos. The firm put 487 AAA classes of the bonds under review for downgrades.
http://www.bloomberg.com/apps/news?p...d=a6JmNfO3eLFU

[GRG55]

Re: Are those the blades of the 'copter Heliben whirring I hear?

Just a matter of time, then, until the CLOs that produced the debt to fund the LBO bubble are accepted by the Fed as collateral for short term loans.

Any guesses when that happens? By the end of this year?

And then there's this little beauty from last week [apologies if someone else already posted this elsewhere]. In spite of all the prior news, warnings and discussions on iTulip, I still find this kind of news truly astonishing. The extent of the abuse and fraud by the ratings agencies and others on Wall Street was truly breathtaking. Enron was trivial compared to this.

That they haven't been sued out of existence, like Arthur Anderson LLP, is mystifying...

S&P Lowers CDO Assumptions, Signaling More Downgrades

By Jody Shenn
April 28 (Bloomberg) -- Standard & Poor's lowered its assumptions for how much money investors will recover after defaults of mortgage-tied collateralized debt obligations, a sign that the firm may be preparing to add to record downgrades...

...The CDOs covered by S&P's revision are at least 40 percent invested in some U.S. home-loan bonds created since Sept. 30, 2005 or pieces of other CDOs with such holdings, according to a statement today. The most-senior bonds from the CDOs originally rated AAA should recover 60 percent of principal owed, while securities rated A or lower will get nothing, S&P said...

...Investors should recover 35 percent of principal after defaults on securities from the CDOs junior to their so-called super-senior classes but also originally rated AAA, S&P said today. Originally AA classes should recover 5 percent, it said...
http://www.bloomberg.com/apps/news?p...d=aHoe0y9VUukg

[blazespinnaker]

Re: Are those the blades of the 'copter Heliben whirring I hear?

What really makes me nervous is Warren Buffet and his dancing around his Moody ownership, when there is such a very obvious conflict of interest there .. especially now that he's getting into bond insurance.

When you see Warren Buffet equivocating, you know things must be pretty Fubar'd..

[Mega]

Re: Are those the blades of the 'copter Heliben whirring I hear?

In for a Penny...............
..........In for a £................Or many £'s !
Mega