[NYTr] Booming Economy: Banks move to help credit markets -- or themselves?

[All the News That Doesn't Fit]

Gold Anti-Trust Action Committee - Oct 15, 2007
http://www.gata.org

Banks move to help credit markets -- or themselves?

The headline the Associated Press put on the story appended here
is "Banks Move to Help Credit Markets." It might better read: "Big
Banks Collude to Trade Their Phony Paper with Each Other to Prevent
a Market from Breaking Out and Exposing Their Fraud."

Of course superintending this anti-trust violation is the U.S.
Treasury Department.

CHRIS POWELL, Secretary/Treasurer 
Gold Anti-Trust Action Committee Inc.

                          * * *

AP via Yahoo - Oct 15, 2007
http://biz.yahoo.com/ap/071015/banks_credit.html

Banks Move to Help Credit Markets

Citigroup, Bank of America, JPMorgan Chase Create Entity 
to Buy Distressed Debt Assets

By The Associated Press

NEW YORK -- The nation's three largest banks on Monday said they
will team up to buy securities hurt during the summer's mortgage
turmoil and revive troubled credit markets.

The Treasury Department introduced the idea of a bailout in recent
talks with Citigroup Inc., Bank of America Corp., JPMorgan Chase &
Co, and others. It was not known how much money would be put into
the fund, but there have been reports it could be between $80 billion
to $100 billion.

The banks said they hope to have the fund, called the Master Liquidity
Enhancement Conduit or M-LEC, in operation within the next 90 days.
Its primary focus will be to buy troubled assets from bank-run
"structured investment vehicles."

Those so-called SIVs, which are held off of the banks' balance
sheets, used short-term debt called commercial paper to buy longer-term
mortgage-backed bonds and other securities. These investments lost
value as credit markets stalled, making it more difficult for the
SIVs to sell commercial paper.

The idea is that the fund will inject enough liquidity into the
market to make investors more confident in buying commercial paper,
which many companies need to sell in order to finance short-term
expenses like payroll.

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