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From The Rumor Bag: Fannie Cuts Off 10 European Banks In Short-Term Funding Market
From the rumor bag:
Not too sure what to make of this, but this rumor is around on Chicago area short term rate desks
Just heard that Fannie has cut off up to 10 European banks in the short-term funding mkt (not hearing why), meaning that they will have to borrow elsewhere going forward, thus being blamed for the movement down in price in Fed Funds mkt & Eurodollar mkt (expecting LIBOR to be higher tmrw & next few days b/c more people will need to borrow). That movement is being blamed for the 2yr selloff / curve flattening & thus impacting the long end as well (just not as much).
Setting aside the implications for european short-term funding, it may be time to take a look at Libor futures once again.
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Anybody cares to explain why Fannie is in the banks lending business?. Isn't fannie responsible for buying up mortgages only?
rumor has it that european banks had too much exposure to lemonparty and did not hedge their counterparty risk sufficiently through niggaflip
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Surely this will push stocks higher..each day I rest easy knowing the sacred ponzi will never end
Ok, I'm dense. Is this saying FNM is saying it won't use 10 Euro banks for funding?
Could it be because they need to prop up the US banks with the 100% of par buying of toxic MBS and the Euro banks were cutting into the profits?
I'm just saying...
why would it push stock higher?
Why wouldn't it?
"It could have been worse" is the usual mantra.
Try this on for size..."10 banks cut off? Oh MY that's bad. But wait it could have been worse: it could have been 11 banks."
Uh-oh...it's beginning folks...
maybe FNM needs the cash to buy back defaulted loans
Gleefully, I clap my hands! I can't wait!
WHy would Fannie be lending to banks, anyway? Explain?
If the "powers that be" want to shut off the talk about moving away from the Dollar as a reserve currency then promoting the problems of competing currencies like the EURO would be one way to do it.
It's clear that this move by the administraion will put further pressure on the EU's credit markets.
Uh, and then Fannie stopped providing liquity through HFT on the major stock exchanges.
This post is an example of someone who doesnt know the first thing about the funding markets.
-BBH
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