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Stormy Weak end


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Dumbshits overpaying for another broken company

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Someone help me out with this one. Why is BAC paying $29 p/share for MER, at this point in time? I mean, LEH is the fire sale du jour today. Did BAC just decided tonight would be a good time to open its war-chest and swallow a borker? If you really had your eye on MER, you wouldn't buy today unless you thought the price would be higher later, right? Well of course that's stupid. If you had your eye on MER you would wait until it was bargin shopping. The price is stupid and the timing is all wrong. What am I missing? :ph34r:

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Someone help me out with this one.  Why is BAC paying $29 p/share for MER, at this point in time?  I mean, LEH is the fire sale du jour today.  Did BAC just decided tonight would be a good time to open its war-chest and swallow a borker?  If you really had your eye on MER, you wouldn't buy today unless you thought the price would be higher later, right?  Well of course that's stupid.  If you had your eye on MER you would wait until it was bargin shopping.  The price is stupid and the timing is all wrong.  What am I missing? :ph34r:

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Well, BAC is one of the Feed's Primary Dealers. It seems to have been given the role of keeping the Dow from dropping several thousand points in a week, by convincing the public that various financial firms' assets are valuable rather than worthless-- by buying them for much higher prices than they are worth. They already did this with CountryFried. Who knows what they will buy next? They must have some sweet deal with the Feed whereby they are fed some kind of financial caviar for fulfilling this important role. No one is going to tell the public what the deal is though. Why should we be able to find out what our tax money is paying for?

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Someone help me out with this one.? Why is BAC paying $29 p/share for MER, at this point in time?? I mean, LEH is the fire sale du jour today.? Did BAC just decided tonight would be a good time to open its war-chest and swallow a borker?? If you really had your eye on MER, you wouldn't buy today unless you thought the price would be higher later, right?? Well of course that's stupid.? If you had your eye on MER you would wait until it was bargin shopping.? The price is stupid and the timing is all wrong.? What am I missing? :ph34r:

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that BAC did not decide to buy them, the Gummit & FED told them to.

 

U.S. Treasury Department and the Federal Reserve are pushing Bank of America Corp. to buy Merrill Lynch & Co
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I have to give Hank an award this time, for refusing to make the taxpayers bail out Lemon and then very likely everyone else that needs a bailout from here on out.? Good job on this one, Hank!

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nope, taxpayers are still bailing them out indirectly.

 

Fed eases access to emergency credit

 

 

WASHINGTON (AFP) - The Federal Reserve has announced new steps to ease access to emergency credit for struggling financial companies, by broadening the collateral to be used for central bank loans.

 

The unusual Sunday move came as financial markets braced for a possible collapse of Lehman Brothers, a Wall Street giant whose failure could have wide-ranging implicatins for the financial system.

 

"In close collaboration with the Treasury and the Securities and Exchange Commission, we have been in ongoing discussions with market participants, including through the weekend, to identify potential market vulnerabilities in the wake of an unwinding of a major financial institution and to consider appropriate official sector and private sector responses," said Fed chairman Ben Bernanke.

 

"The steps we are announcing today, along with significant commitments from the private sector, are intended to mitigate the potential risks and disruptions to markets."

 

The collateral for the special emergency loans will be expanded to all investment-grade debt securities, the central bank said.

 

Previously, only Treasury securities, agency securities, and AAA-rated mortgage-backed and asset-backed securities could be pledged.

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From the horse's mouth:

http://www.federalreserve.gov/newsevents/p...y/20080914a.htm

 

 

"The collateral eligible to be pledged at the Primary Dealer Credit Facility (PDCF) has been broadened to closely match the types of collateral that can be pledged in the tri-party repo systems of the two major clearing banks. Previously, PDCF collateral had been limited to investment-grade debt securities.

 

The collateral for the Term Securities Lending Facility (TSLF) also has been expanded; eligible collateral for Schedule 2 auctions will now include all investment-grade debt securities. Previously, only Treasury securities, agency securities, and AAA-rated mortgage-backed and asset-backed securities could be pledged.

 

These changes represent a significant broadening in the collateral accepted under both programs and should enhance the effectiveness of these facilities in supporting the liquidity of primary dealers and financial markets more generally.

 

Also, Schedule 2 TSLF auctions will be conducted each week; previously, Schedule 2 auctions had been conducted every two weeks. In addition, the amounts offered under Schedule 2 auctions will be increased to a total of $150 billion, from a total of $125 billion. Amounts offered in Schedule 1 auctions will remain at a total of $50 billion. Thus, the total amount offered in the TSLF program will rise to $200 billion from $175 billion.

 

The Board also adopted an interim final rule that provides a temporary exception to the limitations in section 23A of the Federal Reserve Act. It allows all insured depository institutions to provide liquidity to their affiliates for assets typically funded in the tri-party repo market. This exception expires on January 30, 2009, unless extended by the Board, and is subject to various conditions to promote safety and soundness."

 

So, they broadened the collateral they accept at PDCF and TSLF, increased the amount and frequency of the TSLF, and now PD's can also essentially offer repo's.

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