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New York Fed Discloses CDO Holdings Of Maiden Lane Portfolios
- AIG
- American International Group
- Asset-Backed Securities
- Bank of New York
- Bear Stearns
- CDO
- CDS
- Collateralized Debt Obligations
- Commercial Real Estate
- Counterparties
- Federal Reserve
- Federal Reserve Bank
- Federal Reserve Bank of New York
- Goldman Sachs
- goldman sachs
- JPMorgan Chase
- Maiden Lane I
- Maiden Lane III
- New York Fed
- notional value
- Real estate
- Transparency
In a surprising move, the FRBNY has just released the holdings of Maiden Lane I, II and III. Here is what the Fed is saying about this development:
The Federal Reserve Bank of New York today announced that it has
expanded the information that it makes available to the public related
to the Maiden Lane portfolios. The new information includes nearly all
of the holdings of Maiden Lane LLC (ML)—with the exception of
residential whole loans as that would violate individual borrowers’
privacy—and all of the holdings of Maiden Lane II LLC (MLII) and Maiden
Lane III LLC (ML III).The additional information includes the CUSIP number, descriptor,
and the current principal balance or notional amount outstanding for
all of the positions in each of three Maiden Lane portfolios. The Federal Reserve recognizes the importance of transparency to its
financial stability efforts and will continue to review disclosure
practices with the goal of making additional information publicly
available when possible. The release of this information today comes
after reaching agreement on issues of confidentiality with JPMorgan
Chase with respect to the assets of ML and the American International
Group, Inc. (AIG) with respect to ML II and ML III.
As a reminder:
ML was formed to facilitate the merger of The Bear Stearns
Companies, Inc. and JPMorgan Chase. The New York Fed extended credit to
ML to acquire certain assets of Bear Stearns.ML II and ML III were formed to facilitate the restructuring of the
government’s financial support to AIG. The New York Fed extended credit
to ML II to purchase residential mortgage-backed securities from the
securities lending portfolio of several regulated U.S. insurance
subsidiaries of AIG. The New York Fed extended credit to ML III to
purchase multi-sector collateralized debt obligations from certain
counterparties of AIG Financial Products Corp.
Some preliminary observations:
- ML 1, in addition to holding a boatload of CDOs, has quite a few Residential whole loans, a variety of single names CDS, of which the bulk is CMBX, AMBAC, MBIA, PMI, CDS on Commercial Real Estate, CDS on Munis, CDS on non-agency RMBS, CDS on Non-residential ABS, some treasuries, and just under $3 billion in Interest Rate Swaps.
- ML 2, as noted, contains $35 billion of Non-Agency MBS. It also contains $280 million in cash, held with a Goldman Sachs account. (GOLDMAN SACHS FIN SQ GOVT FS)
- ML 3 consists of a variety of CDOs whose notional value is given as $56 billion. Once again, the Fed parks its cash of $383 million in this account with Goldman Sachs.
We will dig through these in detail shortly.
Full listing of assets:
»
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This is just a political stunt so they don't have to comply with a full audit.
"The Federal Reserve recognizes the importance of transparency to its financial stability efforts and will continue to review disclosure practices with the goal of making additional information publicly available when possible."
I wonder how much Ron Paul had to do with that recognition...
I agree it is to appease Ron Paul. So, are these just holding companies then? LLC. No shit.
I knew the Fed was directly buying individual stocks to prop the market up. This was undisclosed to investors and is a violation of Securities law. This is a felony. All those like myself who purchased Puts or short positions when this information and the information that the Bank of England was also secretly funneling... money to prop up the banks was defrauded. Also, all those within the banks that were privy to this info are guilty of insider trading. Ben Bernanke, Paulson and Geithner and the rest of the tribe should all be in jail by morning….
Bank of England tells of secret £62bn loan to save RBS and HBOS
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6646923/Bank-of-England-tells-of-secret-62bn-loan-to-save-RBS-and-HBOS.html
Bank of England advisers not told about secret £62bn loan to HBOS
http://www.guardian.co.uk/business/2009/dec/03/bank-england-secret-loan-hbos
Bank gave RBS and HBOS 'secret' £62bn loan
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6929451.ece
Fed Refuses to Disclose Recipients of $2 Trillion
http://www.bloomberg.com/apps/news?pid=20601109&sid=apx7XNLnZZlc
Fed Fights Request To Disclose Who Got $2 Trillion In Bailouts
http://www.istockanalyst.com/article/viewarticle/articleid/3775032
Good luck with that! (BTW I'll join in if you get something going)
I second what zenon said.
There are lots of lawyers looking for work right now. Find one willing to start a class action lawsuit.
class action lawsuits are curious beasts.
hey, O/T i am worried about deadhead. haven't seen him since that open sunday forum about where the hell everybody is in this here, today's economy. he exposed himself and haven't seen him since. he cares a lot about the old timer's on this blog.
also where is, I need more cowbell.
these are significant and important avatars, star atars, hotars, bitars.
Agreed. Throw the wolves some meat so they don't go after the herd.
Interesting timing. On the last day of the quarter and the last day of Fed MBS purchases ( for now ). No conclusion, just suspicion about why they are tipping over these trash cans today.
On your point, begs the question as to how long can they can use this event to delay providing either new information or an update.
Keep your eye on the other hand. The magician is up to something...
Agreed.
The other hand is picking the taxpayers pocket in some insidious fashion.
Explains the recent articles questioning why Goldman has so much cash under management.
Wow, the Fed is even owed money by Hilton Hawaiian Village. What would Cricket Blake have to say about that?
Book 'em, Dan-O.
I wonder how they price the swaps, in paticular the CDSs and the interest rate swaps?
A dart board in the Yale Club.
Same way they did in South Park. Watch the episode Margaritaville.
http://www.southparkstuff.com/season_13/episode_1303/epi1303watchonline/
Best episode ever. Well worth the watch
Naw, Scott Tenoman Must Die was the best episode.
The Maiden Lane vehicles were unconstitutional in the first place, but my first reaction to reading this was, "Why would a central bank that sets interest rate policy ever enter into or purchase interest rate swaps?" Seems kinda like Superman runnin' a book on black market kryptonite.
I believe they justfified this under the heading of unusual and exigent circumstances, but I could be wrong.
Under what legal authority is the Fed allowed to acquire non-agency MBS? The 1913 Act might be stretched to cover GSE-backed mortgages on the theory they have (especially since Dec. 24, 2009) the full faith and credit of the Treasury behind them. But how can they own ordinary mortgages Constitutionally?
"As part of extending support to specific institutions, under section 13 (3) of the Federal Reserve Act, the Board of Governors of the Federal Reserve System in 2008 authorized the New York Fed to facilitate lending to three limited liability companies—ML, ML II and ML III."
A frustrating wall of fictional words.
From the Fed's webpage:What securities are eligible for purchase under the program?
Only fixed-rate agency MBS securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae are eligible assets for the program. The program includes, but is not limited to, 30-year, 20-year and 15-year securities of these issuers. The program does not include CMOs, REMICs, Trust IOs/Trust POs and other mortgage derivatives or cash equivalents. Eligible assets may be purchased or sold in specified pools, in "to be announced" (TBA) transactions, and in the dollar roll market."
Maybe the Board of Governors decided unilaterally to go outside the Fed's 1913 Charter, but the question remains: is the legal authority there for holding non-Agency MBS?
What "program" are they referring to?
Section 13 (3) of the Federal Reserve Act, at least the way the Fed interprets it, is pretty broad and open ended. Sort of like the Martial Law of central banking....
Zero Hedge knew those maiden thingies were stuffed full of shit and boy where they right! Congrats!
If the Fed were to take Maiden Lane public, no doubt, it would be 300% oversubcribed and could be the hottest IPO of 2010.
Right now, there is an unprecedented demand for junk, garbage, and/or anything else perceived to be at "rock bottom"...
Too late to buy the bombed out retail stocks, they have already had 300% - 500% runs.
So the speculators will be looking into other garbage bins for bargains.
leveraged speculators perhaps?
great idea robo!
I wonder what they had on the books before they were released today? i.e. this is the positive spin; what is the reality? Somebody's arm must be tired from all the erasing.
shades of Enron
By law, the Fed isn't allowed to buy assets -- it can only lend, as lender of last resort. That was a problem for the Bear Stearns bailout, because JP Morgan said it would only buy Bear if someone else assumed responsibility for the crap. Fed came up with this idea to start a shadow company, called a special purpose vehicle (SPVs were how Enron operated, creating "Chewco" and the like named after Chewbacca - the New York Fed called their SPV "Maiden Lane LLC" for name of the street the NY Fed is located on in southern Manhattan). The deal then was JP Morgan put $1 billion into Maiden Lane, the Fed put $29 billion in cash into it. Maiden Lane paid Bear Stearns $30 billion, which went straight back to JP Morgan as this deal happened simultaneously to JP's purchase of Bear. So Morgan got $30 billion in cash ($29 billion net) and the Fed got stuck owning the crap, but was legally only making a loan to Maiden Lane, who was the legal owner (Maiden Lane was incorporated not in NYC, but in Delaware to avoid paying taxes). By the Fed's own accounting - which is very different from a real company's accounting - Maiden Lane has lost $5 billion between its creation and today.
http://www.talkingpointsmemo.com/archives/2009/03/lowdown_on_aig.php
But who owns Maiden Lane LLC? I don't see how the Fed could say they're not buying assets, even if it's through a subsidiary company. It's insane.
Eggszackly.
Or like how repo 105's are really "sales"
Emergency powers can be quite creative, yah ??
WOW!
Im dissapointed that the fed didn't use more appropriate discriptors like EATSHT_07, URFKD_06, RIPOF_06
TOKSIC_VOMT_001
Hey ZH Thank you for letting me in the club.
I will be quiet now.
It's official, the usa is a criminal org.
Wait wait wait. Do you hear that? Turns out the world is not collapsing into a neverending pit of dispair and civil unrest. So let us just audit the rest of the fed. It's not going to change what's already been done. An audit never does. If it makes you feel any better, we'll wait 6 months before telling everyone what you've done.
Pay the man Shirley.
Nice of them to leave off the key info. Like these assets are worth 50% of a non-performing loan.
ok..so the Irish Government took out its problem banks mortgage portfolios at 53 cents in the Euro today..so on this basis the $156bn in ML is worth around 80 bn..hmmm..i guess if you are the Fed with rigged accounting its not a loss of 76 billion at all..GS market cap is 90 billion...just saying..whats the rate on an overnight tri-partite collateralised repo actually worth if the mark to market is like this?
GMTA vote libertarian...wait..who are you? :)
.
they just wanted to frontrun ZH for once.. they are crossing it off their bucket list now
Hmmm, dollars as back by these loads of... or physical gold.
Gold for the win!
Actually maybe this is a Fed move in trying ANYTHING they can to devalue the dollar?
Gentlemen (yes, yes, ladies too), start your engines!
From my remote corner of the Southern Cone, fretting over the capital transfer provision in the "pack-it-all-in 'health' care bill, busily building greenhouses that grow edibles rather than paper wads, I urge y'all to get goin' while the goin's good.
Bailed out of Wall Street physically and monetarily in 1998, haven't looked back, and recommend y'all read Fukuoka's The Natural Way of Farming for valuable philosophical, logical and practical insights. Every time I go to the bank down here, it's become more complicated and more expensive to transfer money.
Good night, Mrs. Calabash, wherever you are, and I hope you ain't planning to make a stand in the good ol' USA, because it may become highly problematic in less time than any of us would like to believe.
It seems to me that this is a reaction to the revelation that the Comex and LBMA are selling paper contracts for 100 times the metals that they actually possess and that
JPMorgan Chase has been shorting more silver than actually exists.
Very interesting turn of events. Funny how everyone here is questioning the reason, motive, and truthfullness of the disclosure. Will we ever get a "transparent" answer? Tick, Tock, Tick Tock....
I remember a friend was trying to convince me Bear went under because of short sellers, not because of their toxic balance sheet. I am sending him the list of just the mezz loans and see if he will reconsider his argument.
Now we know where GS got the cash to play with the market. Why use your own cash when you can borrow the FEDs.
Each entry has a story on the internet. I just googled the first couple of CUSIPs with interesting results...
From S&P on 00083MAA9
ACA ABS 2007-3 Ltd Cash Flow Mezzanine SF 04-Sep-07 00083MAA9 X $7,000,000 AAA BBB/Watch Neg BBBThis one appears to already be part of a fire sale - 00936BAA2
http://www.bloomberg.com/apps/news?pid=20670001&sid=aaCXmExxNWmA
"some or all of the collateral may be subject to transfer restrictions", sounds like a fire sale
We all knew it was stuffed with junk before they gave the information. We know the banks, pensions and insurance companies are broke if the marked-to-market but what difference will it make at the opening bell?
I know, I know MSNBC, look, lady in a red dress!
http://www.youtube.com/watch?v=E7gGtSgd4Pw
Ratigan Breaking It Down Segment With Eliot Spitzerhttp://www.youtube.com/watch?v=gAtSmR7Z-Kg
Eliot Spitzer Takes On The Fed - MSNBC w/ Dylan Ratigan (7/24/09)I agree with dot_bust
this 100:1 michael bay-size metal manipulation explosion-of-a story about JPMorgan (which is currently still blacked out by major media) is completely tied to this.
The Fed wanted someone to takeover Bear. It is not much different from an FDIC deal on a commercial bank. FDIC ends up with the junk loans. The Fed has no way to deal with the collateral. It goes into some vehicle - Maiden Lane. So what if JPM had been funding it? They were only doing it because the FED had more or less ordered them to lend to Bear. When the deal is over the FED found out what they had got themselves into. JPM did not do it, Bear did it, deep in the woods.
If these bank takeovers seem such a good deal, take your cash and balancesheet down to the FDIC. They have a few deals a week for you to get rich with.
Interesting take on "American racist, anti-government militias" as reported in the Sydney Morning Herald. I wonder how much is fact and how much is fiction?
http://www.smh.com.au/world/extremists-spurred-by-black-president-201003...
Here's the way I see it. Congress is going to pass some type of emergency legislation which requires all cash (sitting in IRA and 401k accounts), to be used by the FED, for placement of portions of these CDOs (and the like) into said accounts. This will sop up loose cash and the accounts will have a "guaranteed" annual rate of return for "life" (of course if held to maturity). This will be the annuity that has been tossed around by all the pundits, wondering what the Government has up its sleeve. The FED/Treasury will guarantee the return of principal to all the accounts affected. Of course everything will be "marked-to-fantasy/par". The beauty of this scheme is that it solves most of the FED's problems, as it dumps all the crap that they've been buying up this last year into retirement accounts that just don't have any good options for all that side-lined cash. Not legal? Heck, what has the Treasury and FED done for the last year that has been legal?
They'll have to rip my 401k from my cold dead hands.
We all knew the ML was loaded with worthless trash, this "transparency" move is nothing more than a distraction. While people are scrutinizing the contents something else is going down elsewhere.
Someone somewhere is airing some very nasty dirty laundry...haven't seen it, but they don't come forward with anything without an underlying motive.
wait and watch...it'll come
it would be quite interesting to know who the counterparties are on all the CDSs in Maidenstein I.
a wafer thin mint, Mr. Morgan?
and look at these beauties from Bride of Maidenstein:
http://www.bloomberg.com/apps/news?pid=20601009&sid=ap2UVP6KVDGs
My question is - Why is there cash in these accounts? What was just sold, and under what terms, to end up with cash. As these were vehicles to suck the toxic waste from bankrupt companies, there is zero chance that the purchase involved cash.
The second question is - Does the Fed have the legal authority to sell assets of the government of the United States of America without the explicit approval of congress?
"it's one, two three what are we fightin' for
what's up i don't give a damn
next stop is Vietnam.
well it's five six seven open up the pearly gates
no time to wonder why
Yippee! we're all gonna die."
"be the first one on your block to have your boy come home in a box."
Mistake.
Give an inch, take a mile.
Say Benny Boy?
What's that in the other hand? Hmmm?
Federal Bank Reserves should be seized by the people, by an Act of Congress, and sold at auction to repay the national debt.
Please, will a constitutional scholar tell me why this is not legal? It certainly seems moral enough. These assets were created by pure dilution of our currency, and thence are the property of none but those who hold that currency.
We do understand that the Fed is part and parcel of the Big Banks, do we not? There is no us and them within that construct...
That which Congress created, it can also disband.
2010 campaign platform: Free Haircuts for All!
These vehicles are a repository (suppository for the taxpayer) of warehoused valuables like Betamax's, 8-track tape decks, Pet Rocks, Pacers, Pintos and Vegas, and those truckloads of Salvador Dali prints that are on sale every Saturday at your local Holiday Inn or Motel 6.
Hope we're not counting any of this dross in our "National Wealth". Chernobyl and Love Canal were less toxic.
The majority of it maybe junk. Waiting for your analysis...
http://ftalphaville.ft.com/blog/2010/04/01/194391/in-the-fed-we-trups/
audit the fed. and timothy's tax returns.
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