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credit crisis: Was the bailout ill-conceived? Say it ain't so! - 11/12/08 01:31 PM
My main man Hank Paulson, head of the HPHF, has changed his mind about spending some of the $700 billion that he hopes to soon access. As of today, Paulson has roughly $60 billion left of the initial $350 billion which has been spent buying preferred shares of banks and insurer AIG.
Remember the Troubled Asset Relief Program (TARP)? The initial plan was to buy illiquid/mis-priced mortgage securities in order to get them off the balance sheets of huge companies in order to stabilize the market/economic system. The Treasury is the only entity that could afford to hold them for a … (3 comments)
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credit crisis: Credit rating agencies questioned before Congress - 10/22/08 04:31 PM
Finally! Some tough questions for the CEOs of the big three: Moody’s, Standard & Poor’s, and Fitch, the credit rating agencies that many feel are ultimately responsible for the sub-prime crisis and ensuing meltdown on Wall Street. For a little background, see my previous post questioning who is to blame for the sub-prime crisis.
As Jeff Macke says of these agencies on CNBC, “they should be taken out and annihilated…they are bringing economy around the globe down...”
Simply stated, the ratings agencies did not do their job. They are were the symbols of trust and credibility to a giant industry that … (3 comments)
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credit crisis: Hammerin' Hank's Hedge Fund: another HPHF update - 10/15/08 06:28 PM
It appears our economy is in a bit of a spot right now. No kidding, right? We learned over the past few days that our U.S. banking system has effectively been nationalized. How did this happen? Hammerin' Hank, of course.
Paulson conspired worked with his Wall Street buddies, the Federal Reserve, and the FDIC before deciding how to use the first $250 billion that we recently invested into the HPHF.
What do you mean, 'nationalized'? The always insightful folks at the Wall Street Journal wrote an informative blog post describing what actually happened early this week. Basically, Hank bought a bunch … (2 comments)
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credit crisis: Bearded Ben Bernanke brings banks billions - 10/08/08 12:33 PM
The Federal Reserve opened its coffers once again in an effort to abate the current credit crisis, at least in this country. One of the big current problems involves banks and other companies refusing to lend each other short-term money, often referred to as commercial paper.
The major problem involves lack of trust between companies. Company A refuses to lend to Company B because they are unsure of the value of assets or collateral Company B will put up for the loan. This complicated part of everyday business has been boiled down to a simple example, but this is part of … (1 comments)
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credit crisis: 'Fundamental' agreement reached on bailout - 09/25/08 12:58 PM
The power brokers in Washington just met for a photo shoot and gave some brief comments about the pending bailout that has dominated the news in recent days. After negotiations between both parties, Sen. Chris Dodd announced that they have agreed, in principle, to the principal amount. Got it? Here are the vague details that Dodd, among others, provided.
Congress will give Paulson the money he needs (assumption: $700 billion) They have agreed on protecting home ownership (how?) They have agreed on executive compensation limits (will be part of the terms of the bailout bill) There will be taxpayer protection (likely … (4 comments)
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credit crisis: Hank Paulson Hedge Fund: update - 09/23/08 06:20 PM
Big Hank went before Congress today to ask for a sizable investment into his fund. He says he needs $700 billion from us, and congressional folks are so far trying to sate him somewhat by contributing $150 billion over the next couple months. The questions are many, and for those of us who are not money market, credit, derivative, TED, swaps experts, they are a bit overwhelming.
Here are the main issues:
Should we give Paulson a blank check so that he can, according to Senator Dodd, "act with absolute impunity", in rescuing our nation's financial system? What amount of money … (4 comments)
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credit crisis: Credit crisis over? Introducing the HPHF - 09/19/08 05:09 PM
Hank Paulson's hedge fund (HPHF) has struck again. They are taking a bunch of bad debt off the hands of the U.S.' largest financial firms. No, they're not banks any longer, simply financial firms. Banks are not having troubles like these multinational companies are.
From my understanding, HPHF will buy MBS (mortgage-backed securities) for less than 50 cents on the dollar, sit on them for a year +, and then resell them. Hundreds of billions of dollars will be spent to do this. Luckily, HPHF has an effectively unlimited supply of funds since we are all investors, can afford to hold … (2 comments)
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John Morrison - Boston area real estate - Exclusive Buyer's Agent, CBR
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