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Saturday, August 25, 2007

Saturday Night Stories

by Calculated Risk on 8/25/2007 09:05:00 PM

Here are a few stories to discuss with your dates tonight:

Fortune: Fed bends rules to help two big banks (hat tip John, Bob, and others!)

In a clear sign that the credit crunch is still affecting the nation's largest financial institutions, the Federal Reserve agreed this week to bend key banking regulations to help out Citigroup and Bank of America, according to documents posted Friday on the Fed's web site.
MarketWatch: Muni bond funds hit by 'perfect storm' (hat tip Mike and others!)
... muni bond prices have fallen in recent weeks, pushing yields higher, as investors moved money into the safest securities, such as short-term Treasury bonds.
And from Barron's, a story on 'pier loans': For Banks, a $300 Billion Hangover
Investment and commercial banks, ranging from Citigroup and JP Morgan to Goldman Sachs and Merrill Lynch , agreed to finance deals that might not close for six months, and at very low interest rates -- and without any escape clauses to protect them if market conditions deteriorated. Why? Because bankers were in hot pursuit of the next underwriting or merger-and-acquisition advisory fee. The private-equity shops knew it and they pushed through some of the most aggressive financing terms ever seen.
Haver: Borrowings at the Federal Reserve Largest in 6 Years; Big Drops in Commercial Paper Outstanding. The second chart on the left shows the sharp drop in commercial paper outstanding - after an incredible increase over the last few years.

AP: Mortgage Mess Hurts Main Street, Beyond

Telegraph: Brace yourself for the insolvency crunch (hat tip Kendall)

Your date will find you fascinating tonight!

UPDATE: From Gretchen Morgenson at the NY Times: Inside the Countrywide Lending Spree

Next week should be interesting, from existing home sales on Monday (inventory is the most interesting number) to Bernanke's speech on Friday: "Housing and Monetary Policy".