On Sun, 16 Mar 2008 19:39:01 -0700 (PDT), Too_Many_Tools
wrote:

One for the record books...

The US taxpayer is paying for this one.

How do you like being a part owner of a bankrupt bank?

There are likely more to come.

And the Iraq War is costing you $12 billion a month.

How deep are your pockets?

TMT
==============
Q: why do we have to read a UK paper to get this depth and
quality of analysis?
==============

Is Lehman Bros next on the hit list?
"The swap spreads on Lehman Brothers rocketed to 465 yesterday,
mirroring the moves in Bear Stearns debt days before."

--------------
The foreign financial markets just voted --- The consensus of
opinion on the Bear Stearns "Rescue?" --- NO SALE!
----------
Foreign investors veto Fed rescue

By Ambrose Evans-Pritchard, International Business Editor {UK
Telegraph}
Last Updated: 1:13pm GMT 17/03/2008

As feared, foreign bond holders have begun to exercise a
collective vote of no confidence in the devaluation policies of
the US government. The Federal Reserve faces a potential veto of
its rescue measures.
snip
Asian, Mid East and European investors stood aside at last week's
auction of 10-year US Treasury notes.
snip
The share of foreign buyers ("indirect bidders") plummeted to
5.8pc, from an average 25pc over the last eight weeks. On the
Richter Scale of unfolding dramas, this matches the death of Bear
Stearns.

Rightly or wrongly, a view has taken hold that Washington is
cynically debasing the coinage, hoping to export its day of
reckoning through beggar-thy-neighbour policies.
snip
The Fed's emergency actions are imperative. Last week's collapse
of confidence in the creditworthiness of Fannie Mae and Freddie
Mac was life-threatening. These agencies underpin 60pc of the
$11,000bn market for US home loans.
snip
As of June 2007, foreigners owned $6,007bn of long-term US debt.
(Equal to 66pc of the entire US federal debt). The biggest
holdings by country are, in billions: Japan (901), China (870),
UK (475), Luxembourg (424), Cayman Islands (422), Belgium (369),
Ireland (176), Germany (155), Switzerland (140), Bermuda (133),
Netherlands (123), Korea (118), Russia (109), Taiwan (107),
Canada (106), Brazil (103). Who is jumping ship?

The Chinese have quickened the pace of yuan appreciation to choke
off 8.7pc inflation, slowing US bond purchases. Petrodollar
funds, working through UK off-shore accounts, are clearly dumping
dollars amid rumours that Gulf states - overheating wildly - are
about to break their dollar pegs. But mostly likely, the twin
crash in the dollar and US agency debt reflects a broad exodus by
global wealth managers, afraid that America is spinning out of
control. Sauve qui peut.
snip
Japanese investors and foreign funds are having to close their
yen "carry trade" positions. A chunk of the $1,400bn trade built
up over six years has been viciously unwound in weeks. The harder
the dollar falls, the further this must go.
snip
==========
for complete article click on
http://www.telegraph.co.uk/money/mai.../ccview117.xml

also see
===========
Bear Stearns exposed as a bank saddled with toxic sub-prime debt

By Ambrose Evans-Pritchard {UK Telegraph}
Last Updated: 12:07am GMT 16/03/2008

Big American finance houses have collapsed before. Continental
Illinois required a $4.5bn (£2.25bn) bail-out in 1984 after
coming to grief in Texas as the oil boom deflated.
snip
The giant hedge fund Long Term Capital Management was saved by a
club of banks in 1998 under the guidance New York Federal
Reserve. The fund blew up after Russia's default, which ravaged
its portfolio of Danish, Italian and Spanish bonds.

snip

On both occasions the US economy was in rude good health. The
damage was quickly contained.

The implosion of Bear Stearns is more dangerous.

A host of other banks, broker dealers, and hedge funds have
played the same game, deploying massive leverage at the top of
the credit bubble to eke out extra yield. Dozens of them are
saddled with the same toxic debt - sub-prime property, credit
cards, auto loans, and mountains of unsold paper from the merger
boom.

This time the market for default insurance is flashing bright red
warning signals across the entire spectrum of US finance.

The swap spreads on Lehman Brothers rocketed to 465 yesterday,
mirroring the moves in Bear Stearns debt days before. Fannie Mae
and Freddie Mac - the venerable agencies created by Roosevelt
that underpin 60pc of the $11 trillion mortgage market - had a
heart attack on Monday. Their bonds were in free-fall,
threatening to set off another cascade of bank writedowns.

These are not sub-prime outfits. They sit at the apex of the US
mortgage credit industry. Hence the dramatic move by the Fed this
week to offer a $200bn lifeline, agreeing to accept Fannie Mae
and Freddie Mac issues as collateral.

Had the Fed delayed, many traders believe Wall Street would have
plunged through resistance levels risking a full-fledged crash.
==========
for complete article click on
http://www.telegraph.co.uk/money/mai...15/ccom115.xml

Hear come the CDS "bombs"


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).