| Posted: 16 September 2008 at 8:35am | IP Logged | 3
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Michael Myers? This ran across my desk this morning. Funny isn't it?
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At the urging of the Plunge Protection Team, a group of ten global
banks has agreed to create a $70 billion pool of funds, so that they
can borrow money from the pool in times of crisis. The banks also
asserted a "mutual commitment" to keep trading with each other, and to
work together to help work out the derivatives exposures of Lehman
Brothers and its derivatives counterparties.
The ten banks agreed to pony up $7 billion each for the pool, after
which any of the ten can borrow up to a third of the fund, and said
they might increase the size of the pool should other banks want to buy
in. The banks behind this laughable plan - Bank of America, Barclays,
Citibank, Credit Suisse, Deutsche Bank, Goldman Sachs, J.P. Morgan,
Merrill Lynch, Morgan Stanley and UBS - include some of the most
bankrupt banks on the planet, and the ten have collectively already
taken over $235 billion in losses on their securities portfolios since
last year.
We suspect that this is actually a derivatives clearing
arrangement, in which the zombies all pledge to treat each other as if
they were solvent, and dip into the pool as necessary as they work out
their toxic mountains of derivatives deals. Still, any way you cut it,
it's a circle of drunks - or corpses - leaning on each other to try to
keep from falling down.
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