Sat, 13 Oct 2007

Banks May Pool Billions to Stop Securities Sell-Off

This is the real killer:

The proposal echoes the 1998 bailout of the hedge fund Long Term Capital Management, when a group of big banks came together to prevent the fund from collapsing after it made a series of bad bets. And the current round of crisis-driven collaboration illustrates the heightened level of concern among both government and financial players.

I can't seem to recall the last time banks lined up to bail my ass out of a jam - all they seem to want to do to us "little people" is foreclose our homes and drive us into bankruptcy. But let one of their own make a series of "bad bets" and billions are suddenly available to help out.

Several of the world’s biggest banks are in talks to put up about $75 billion in backup financing that could be used to buy risky mortgage securities and other assets.

(link) [NYT >New York Times]

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