Single-Master Liquidity Enhancement Conduit

I'm surprised nobody has started a thread on this. What are your views on this plan being carried out by a consortium of Citibank JPMorgan and Bank of America as well as other financial institutions?

I'm pretty certain it will work out and even without it, I feel that the market will recover on its own. Anyway it all bodes well for the carry trades.

But even with or without it helping the yen pairs, if this plan fails and it is reported there will be the risk of a sharp downturn in the yen pairs.

Jody, can you provide a reference? I am not familiar with this.

http://www.rttnews.com/sp/Quickfacts.../2007&item=110

second post. I got my news from FT and Dow Jones NewsPlus so I can't show you the real source. I just googled this. Anyway this conduit is basically a fund that a consortium of banks created to revive liquidity in the commercial paper markets that suffered from the sub-prime problems.

Phil - it was in the WSJ this am; here's a bit more info from AP. Bloomberg's may also have a fuller story.
Personally I think it's rather dangerous; it's a little over a year to the next US election, and the proposal - while helping banks via normally legally questionable collusion and price fixing - will not (apparently) be aimed at also helping in the sub-prime. So the banks get their tears wiped while the Fed bends the rules, but people will still be losing their houses. At least I figure that's how it's going to play politically.
The 3 banks involved are all big boys, they (and their investors) should be willing to take their lumps for idiotic investment policies. hmmmm, I seem to be ranting

John Mauldin did a nice job explaining this in his weekly newsletter.

Thx phil, great article.

Excellent article by John Mauldin once again, but they key question is, can this fund stave off the sub-prime crisis?

Imo, this crisis relates to CDOs involving mortgages with owners that are not that credit worthy. And the thing is, many mortgages and other assets have been hit because of it. In fact many of these are sound and will reap rewards for its investors and I guess the fund's primary purpose is to prevent these other instruments from facing massive liquidation just because everybody is now risk averse.