BSC has to many counterparty trades with Citi to let BSC (Bear) Fail. The Fed and JP Morgan could not let that Happen. Tommarow will be a very important day to be sure we get thru this. While everyone is publicly talking about LEH be the next problem, the Whispers are the big problem that the FED cannot let fail is Citigroup.
Naw, can’t be. That genius Bobby Rubin was Chairman. Surely he wouldn’t have allowed his baby to get tangled in those complicated mortgage instruments! /s
The real saving story is that the Fed has opened up the Disc Window to Firms to Barrow aginst their illiquid Fixed income Position, this might be what we really need to fix this liquidity crisis. This IMO is not a credit crisis but a liquidity crisis not seen since the summer of 1932. If we can get liquidy then that will enable firms to be able to use there balance sheets to bring order back in. What retail individuals do not realize is the middle markets and institutional market certian markets such as counterparty trades, repurchase agreements, Credit Default swaps, Auction paper has become very illiquid.
This FED move may help unfreeze that market