This is a clip from Aug 12th on Bloomberg News (running time ~~ 4 minutes)… it concerns the auction rate securities markets…analysis by Adam Dean, President of SVB Asset Management and Joe Mysak, Bloomberg columnist…
Mr. Dean talks about the approx $ 200 billion dollars of ARS that the large banks had to bring back on their balance sheets due to their settlement with the SEC and the states Attorneys General… I’ve been wondering for several months if this was a cause of the failure or near failure of the banks involved like LEH, GS, MS, C… they are so highly levered that pushing securities back would have challenged their liquidity and their capital adequacy…
I didn’t realize but Mr. Dean also mentioned that the banks got about 50 bp for underwriting the auctions… nice work if you can get it…
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