The Canadian Bank points out it is not a backup liquidity provider to either trusts and that there will be no impact on the company’s support and conduit ratings.
Billionaire-investor Wilbur Ross says he expects his investment in Assured Guaranty to be completed by the end of March. He sees Assured Guaranty has a vehicle for bond insurer consolidation, but he is still talking to other bond insurers about potential deals.
FED Governor Frederic Mishkin delivered a book report in New York today on the publication “Leveraged Losses: Lessons from the Mortgage Meltdown” by David Greenlaw, Jan Hatzius, Anil Kashyap, and Hyun Song Shin. Most of Mishkin’s comments were a summary of that paper, discussing how the subprime crisis eventually spread to the entire financial system. While most of this is old news, Mishkin did make the following two points:
* Disruptions to the financial system is far broader than just to leveraged institutions
* To the extent the meltdown in the mortgage market has revealed even deeper problems in the financial system , the negative impact on the economy could be larger
Boston Fed President Eric Rosengren spoke in New York City today and said he expects the U.S. economy to “skirt a recession”. He went on to say the housing slump could worsen, but thinks rate cuts will help mitigate losses. However, Rosengren said any further drops in home price will harm consumer spending, residential investment and balance sheets at “large instiutions”.
An ECB economist expressing his personal view said recent aggressive rate cuts by the FED are risky and could cause “dangerous effects”. He went on to cite a probable cause of current problems is Fed Policy during 2001.
ECRI US Index Annualized Growth Rate: -9.6% vs. -10.2% Prior