[lbo-talk] Fed's looking a little scared

B. docile_body at yahoo.com
Fri Mar 14 09:24:41 PDT 2008


Quick question - is "going to the Fed's discount window," and what I read below, essentially the postmodern way -- sorry, I mean the economist's wonky way -- of saying "going to the doorstep of govt. help with hat in hand?"

I know it's probably a little bit more complex than that, yadda yadda, but to me, a lay person, that's what it reads, esp. since the NYT headline mentioned a "bail out." The Investopedia online dictionary of econ. terms mentions going to the Fed's discount window is "highly discouraged."

http://www.nytimes.com/2008/03/14/business/14cnd-bear.html?ex=1363147200&en=4b57b6b4bce70167&ei=5088&partner=rssnyt&emc=rss

-B.

Doug Henwood wrote:

"This press release just came out. Earlier this morning, they announced that Bear Stearns, a brokerage firm that serves a lot of hedge fund clients that has had trouble with some of its own funds lately and which has been rumored to be in trouble, had a line of

credit with JP Morgan Chase, which in turn has a direct pipeline to the Fed's discount window. Bear can't borrow directly from the Fed, so this is the next best thing. This is all highly unusual."



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