Report: Banks Prepping Up To $100 Billion Fund Against Securities Collapses

CNN:

A consortium of the world's biggest banks, led by Citigroup, is working to create a fund to back up to $100 billion in shaky mortgage and other securities, according to published reports Sunday.

The fund, according to reports in the New York Times and Wall Street Journal, would be used to buy securities at risk in the current credit crunch in an effort to avoid a broader economic problem. An agreement on the fund's framework could be announced as early as Monday, the Times reported, adding the talks were ongoing and could still result in no accord.

Read the whole story: CNN

Comments

[mmckinl]

01:51 PM on 10/16/2007

Another Billionaire Bailout ...

Wow ! 150 Billion in loan loss reserves ! And the 'banks' are talking about a fund for 100 miillion ? That is less than 1% of the amount needed.

CITI and Bof A are taliking about selling bonds to create this fund. Who is going to buy any of these bonds?

I don't see that working .

Of course the US Treasury will step in and guarantee these bonds putting the tax payer on the hook for the bailout. This is just what happened with the Mexican Bonds. They went bust , the US paid everybody off.

[pigsatthetrough]

12:44 PM on 10/15/2007

Once someone gets past the senseless posts, 'Clinton did it', the reality is that this is not the whole story. The SIVs are about 400 Billion, and the Banks will need to bail it all out, not just the intial 100 Billion. No matter what price this goes down at, it is still a delaying tactic. The short term commercial paper will drag the markets down, with or without these preliminary attempts. The repugnants had better pray that Hillary gets elected. then they can have a field day, it will be on her watch, and they can again shuffle the blame, and perhaps even impeach a Clinton. What a joke, the banks trying to bail themselves out, the Repugnants continuing with their BS and consumers looking to buy more to support the economy with the aid of credit cards. Ring around the rosey?

[ProfessorRydstrom]

04:12 PM on 10/15/2007

With a $10 trillion mortgage market, the subprime market is about 15%. Assuming a loss ratio of some 10%, a loss bailout or RESCUE would be in the area of $150 billion. A $100 to $300 million blanket will not be sufficient. $1 billion is a good start, but we will need much more. Are we talking a Bailout of the Economy or a Bailout of Homeowners? Are we recommending blind bailouts or borrower handouts, Wall Street Bailouts, China or Japan Bailouts? We should be talking a comprehensive rescue of our economy and its participants and safeguards, including the homeowners who may be thrown to the streets. We need a total market refined working solution. One way to solve this shortfall is to implement tradable FMII™ type insured mortgage investment funds. Click http://waysandmeans.house.gov/hearings.asp?formmode=view&id=5617. These funds would build up huge excess equity and profits as the high-risk high-yield subprime and Alt-A mortgage markets have proven to be at least an 80% good bet. The short and long term solution must include a mechanism to safeguard against extreme market devaluation and the defaulting 13-20%. FMII™ is an ‘EQUITY BUILDING BAILOUT FUND’ (EBBF) that supports the narrowly defined risks associated with the mortgage industry, especially subprime and Alt-A borrowers. This will help reduce adding RahC and RahD into the price-risk formula. For more info go to: www.equitybuildingbailoutfunds.org; www.equitybuildingrescuefunds.org;
We must safeguard our economy from market destruction but at the same time make laws and industry practices that see a steady and voracious growth across the board in new homeownership for decades to come. For more info go to: www.freebutresponsibleopenmarkets.org or www.fbrom.org.
www.HelpHomeowners.Org
www.Help4ThePeople.Org
www.Help4TheLenders.Com
www.Help4TheServicers.Com
www.ShadowBanking.Com
Related News Feeds: www.enewscouncil.com
Richard Ivar Rydstrom, Esq. | [e-mail]

[demsrnuts]

09:03 PM on 10/14/2007

The bad news for those who still worship Mr. Clinton is that Enron not only donated $100,000 to Clinton's 1993 inauguration but, according to the records, also added an additional $25,000 to the Clinton 1993 celebrations.

The documented evidence shows that Enron did make it into the Clinton White House by special invitation. Senior Vice President Terrance H. Thorn had coffee with Bill Clinton on March 5, 1996.

Many of the other attendees of the Clinton White House coffee sessions also make up a long list of convicted criminals, arms dealers and bagmen for illegal DNC contributions.

For example, Wang Jun had coffee with Clinton in 1996. Wang is also the president of Poly Technologies, the largest arms trading firm owned by the People's Liberation Army. Poly Tech is currently banned from doing business in the United States after several of its top executives conspired to smuggle machine guns into the U.S. for sale to a major drug dealer – who later turned out to be a Customs agent posing as a gangster.

Charlie "Yah Lin" Trie, who was later convicted of illegally passing hundreds of thousands of dollars to the Clinton/Gore re-election campaign, brought Wang into the White House. Trie also gave an additional $645,000 to the Democratic National Committee, and most of this money was from illegal foreign sources.

[mmckinl]

02:08 AM on 10/15/2007

Oh please ...

Kenny Boy Lay was Bush's buddy and part of Cheney's energy task force.

Lonely at the RNC ?

[Tr0uBle]

09:00 PM on 10/14/2007

ENOUGH IS ENOUGH

Let Congress know targeting Smokers with a $6.10 a Carton Tax Hike is going too Far!

SAY NO to Higher Cigarette Taxes

www.stoptheFETincrease.com
Or
Call 1-866-527-4494

[mmckinl]

02:09 AM on 10/15/2007

How much did Altria pay you to fight SCHIPS?

You should be ashamed of yourself!

[demsrnuts]

08:58 PM on 10/14/2007

The fact that these banks have this kind of money shows how strong they are..They are not in any danger, they're simply shielding themselves from danger...Banks rarely lose !! The S+L's were not real banks !!!

[conservativeoriginalist]

07:45 PM on 10/14/2007

$100 billion....where have I heard that number in regards to the banking industry recently? Hmmm....oh, yeah, its about the amount the Federal Reserve printed up in August to give to the lenders who are on the verge of financial collapse.

Geez, any correlation here?

[anangryamerican]

06:56 PM on 10/14/2007

BANKS HAVE ALWAYS BEEN THE PROBLEM ...from the Great Depression to the S&L Crisis till now, the Credit Crisis. The Rethugs dont think we need regulation???? These bankers, hedge fund brokers are no more than glorified tellers out to make millions! TIME TO REGULATE AND WITH HUGE PENALTIES!

[LittleGreenGreaseBalls]

07:06 PM on 10/14/2007

Regulation is un-American. Huge penalties are for suckers who forget to pay Mastercard or accidently overdrawn bank accounts. Banks are our friends. :)

[mmckinl]

07:25 PM on 10/14/2007

You have forgotten many bank shenanigans including Enron . The banks helped Enron hide all that debt with off balance sheet loans and leasebacks.

Then there was the hedge fund Long Term Capital where banks let it leverage out to the point where they were controlling trilllions with only tens of millions in capital.

[nomoredead]

06:04 PM on 10/14/2007

...and these guys could have been investing my Social Security money if bush had his way???

[mmckinl]

06:32 PM on 10/14/2007

Why do you think they were pushing the idea in the first place?

They wanted to leave Social Security holding the bag!

[conservativeoriginalist]

07:41 PM on 10/14/2007

Social Security is already holding the bag for the last 40 years of pork spending by the Congress. Its filled with IOUs, which the government is incapable of paying back when the notes mature.

[LittleGreenGreaseBalls]

06:54 PM on 10/14/2007

No, they'd have been leveraging your social security money. Just like Enron.

[MetalCanuck]

05:52 PM on 10/14/2007

Who talks about this issue and how to solve it the most? RON PAUL! Folks he is right on the issue and other than wars its the most important issues out there. WAKE UP! We need someone who will solve the corruption problem in the banking and currency problems.

[LittleGreenGreaseBalls]

06:55 PM on 10/14/2007

You're right. But we also need someone who can win. We can't afford another Ralph Nader.

[MetalCanuck]

07:22 PM on 10/14/2007

He can win if people stop listening to MSM. Do not let the media tell you who can or cannot win.

[ZingoBonMot]

09:44 PM on 10/14/2007

~MetalCabuck~
Stop blowing smoke up my ass and TELL THE TRUTH!!! Ron Paul wants to abolish the Social Security program, doesn't he?

[MetalCanuck]

12:29 AM on 10/15/2007

Nope, he says it himself that he will not be getting rid of that.

[civilbehavior]

05:13 PM on 10/14/2007

Would someone please explain to me why the American public keeps putting up with this travesty of an administration crying and whining about the imminent threats to our existence from their armchairs and they haven't gotten into the streets in the millions?


Would someone PLEASE explain that to me?

[WorkingClass]

06:25 PM on 10/14/2007

We live in a police state now. If you take to the streets you will get hurt. What else could it be? Lack of leadership? I could go down to the court house and carry a sign. Is that what you are talking about. I expect at some point there will be riots. But “demonstrations” are simply not allowed anymore.

[mmckinl]

06:36 PM on 10/14/2007

America can't be bothered. It's football season. Then it's basketball season , then it's baseball season.

Soon it will be bankruptcy season.

Even more foreclosures next year, meaning more financial defaults.

Put on your seatbelts , it's gonna be a bumpy ride.

[olephart]

05:13 PM on 10/14/2007

Let's just pretend the banks are poor kids in need of medical care. Is that OK Trolls? Oh Trolls, where are you. If the headline said 100 billion for children's healthcare you'd be here in force. Trolls, we need you to step up and take responsibility for this shit. UNREGULATED hedge funds, just the way you like your economy. Repeal of the Glass-Steagall Act? Remember the deregulation of the Savings and Loan Industry and the 300 billion dollar clean up? There's another big mess on the floor. Trolls, Trolls, clean up on aisle 3.

[mmckinl]

05:36 PM on 10/14/2007

How dare you telll the truth !

[clumberfeet]

05:07 PM on 10/14/2007

Here is the dialog of the meeting,

Bank A, I would like to welcome banks B and C for bringing their assets to this meeting on our securities crisis.
Bank B, I would like to welcome banks A and C for bringing their assets to this meeting on our securities crisis.
Bank C, I would like to welcome banks A and B for bringing their assets to this meeting on our securities crisis.

The meeting moderators, Abbot and Costello proposed the first question to the panel. Who's on first?

[workingboy]

04:50 PM on 10/14/2007

banks are getting together to stave off a collapse; gap between rich and poor getting bigger and bigger -- reads like a prelude to the Great Depression. never saw a Kennedy or a Rockefeller in the breadlines; they and their ilk were immune. you won't see Poppy or Barrr or Darth or the Evaginator in breadlines; their bucks are in Dubai. the Depression taught us the value of keeping Wall St. out of banks; we forget, and the firewalls are gone, so get prepared: go shopping!

[LittleGreenGreaseBalls]

06:57 PM on 10/14/2007

What's your problem? As long as Visa puts out and the malls are open we're fine. Just fine.

[anangryamerican]

07:00 PM on 10/14/2007

it is THIS administration that demolished the Glass/Steigle Act...to prevent the overlap of securities and banking placed AFTER the Depression. Bush has ruined EVERYTHING!

[MancRat]

04:33 PM on 10/14/2007

This isn't how the script reads.

The neocancers planned it so that the bubble would burst on a Democratic President's watch, meaning they get to howl from the sidelines as someone else makes the tough calls and cleans up their mess.

If cleaning is possible, that is. Nine trillion in debt is a lot of poop to scoop.

[mmckinl]

05:28 PM on 10/14/2007

LOL

The Repubs are heading for the door early ... They see the impending collapse . It's a small door and a big crowd.

[Danny]

04:24 PM on 10/14/2007

Socialism for the rich. It's the latest trend. OUR money, their losses, covered. Nice how "free markets" work -- always "OUR money", their losses that WE cover.

[ZingoBonMot]

07:34 PM on 10/14/2007

~Danny~

Are you old enough to remember the Savings & Loan scandals? Corporate welfare at it's finest!
While the American taxpayer was busy paying off the "bad debts" of hundreds of UNREGULATED and UNINSURED S&Ls, nobody in this stellar media of ours bothered to address the fact that while these schmucks were CHARGING an average of 23% for a loan, they were also PAYING about 12% interest on deposits, far more than the average REGULATED and INSURED bank. Appealing to innate human greed is a great way to take in billions and then just skip town (or the country, as the case may be).
If this current "sub-prime crisis" isn't the same scenario repeating itself all over again, then I don't know what is.