Links 9/15/08

Controlled drugs dumped uncontrolled into water PhysOrg

Fears over privacy as police expand surveillance project Guardian

The NYT Turns to the Arsonist to Analyze the Fire: Greenspan on Bank Bailouts Dean Baker

Fed Widens Collateral, Banks Set Up $70 Billion Fund Bloomberg

Can the Fed Help AIG? Will It? Wall Street Journal Economics Blog. An important observation: Fed rules may prohibit it lending to AIG because it refused funding from private equity firms.

Why Would BofA Buy Merrill? Paul Kedrosky

Fed Watch: End Game Tim Duy, Economist’s View

Financial Russian Roulette Paul Krugman

Merrill Lynch and a guy who admits killing an underworld hitman John Hempton

Antidote du jour:

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  1. depresso

    About equities as collateral:

    1) Fed says:
    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.

    2) Wikipedia says: Equity repo
    The underlying security for most repo transactions is in the form of government or corporate bonds. Equity repos are simply repos on equity securities such as common (or ordinary) shares. Some complications can arise because of greater complexity in the tax rules for dividends as opposed to coupons.

  2. doc holiday

    Financial cannibalism has to do with the process of one bank eating another bank, i.e, this gruesome event is a means by which the expression of naked power over a weaker victim is exercised.

    IMHO, banks that thrive on this type of diet will experience symptoms related to Mad Cow, a fatal, neurodegenerative disease transmitted to human beings who eat the brain or spinal cord of infected carcasses.

    As a tip, banks that have been exposed to fraud or in cases where you lack due diligence to help understand the condition of your speculative victim, wash your hands, fully cook your bank and don’t talk while eating.

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