Predicted and Predictable - re-run the second reel will ya ?

BoE confirms 314 mln stg use of its credit facility

(Thomson Financial) - August 22 nd 2007 - The pound fell after the Bank of England confirmed it lent £ 314 Mn. from its standing lending facility yesterday, the first occasion the facility has been used since credit market conditions tightened abruptly last month.

The facility, which allows banks in urgent need of short-term credit to borrow from the BoE at 6.75 pct, 100 basis points above base rate.

The BoE did not disclose who the borrower was, and did not say whether the loan was taken out by a single bank.

UK mortgage banks Northern Rock and Bradford Bingley, named as possible borrowers by traders, both denied they took out the loan, as did Lloyds TSB, Alliance & Leicester, and Abbey, the UK lender owned by Banco Santander Central Hispano of Spain.

Barclays declined to comment, while HSBC, Royal Bank of Scotland, HBOS, and Standard Chartered were not immediately available to comment.

This is what Lord Patel Posted ......

The Federal Reserve seems to be manufacturing an impressive supply of "greater fools" to go along with the dribs'n'drabs of credit that it is dropping into the sucking chest wound that the economy has become for the body politic. The Fed's idea, I suppose, is that if they lend a little money to the geniuses who engineered the latest (and probably last) bubble of the cheap oil age to cover their present losses, then the US economy will "right itself." What I think they don't get is that finance has virtually become the US economy -- if you subtract it, there is nothing left besides hair-styling, fried chicken, and colonoscopies. By "righting the economy" do people mean the ability to keep running a transparently fraudulent set of rackets that have nothing whatever to do with financing real productive activity?

By "greater fools" I mean, of course, buyers willing to step up and purchase securities that other people are shedding as if they were smallpox blankets. But even the Fed's supply of greater fools may prove insufficient when it becomes evident how much bad paper really is out there, and how it has been allowed to contaminate every tradable niche in the banking and investment house of horrors. I don't think we've begun to hear the disclosures.




........Personally, I don't quite get how a financial industry based on bad loans would be helped by borrowing more money to bail out a hopelessly unwinding Ponzi loan racket of the type the industry had engineered for itself -- but maybe I'm lacking the gene for financial creativity that the Bear Stearns bonus babies were all born with.

Today the ultimate and truly savage irony is that those paper peddlers were truly fucked over as they took their bonuses in Bear Stearns stock.... and of course on August 4th 2007 CEO Warren Spector checked out the door. Cashing in on the way out.