Canadian Credit Crisis in a nutshell

[oblom]

# 40-billion in ABCP is frozen.
# The Québec Pension Plan (Caisse) and the Ontario Teachers' Pension Plan are on the hook as are 40 other trustholders, mining companies, paper companies, etc all of which thought they were buying short term easily marketable notes.
# What they were really buying was toxic waste from troubled mortgage loans in the U.S.
# A workout plan called the Montreal Accord was originated by Caisse. The proposed solution was to convert short term debt to long term debt some of which stretches out all the way to 2015, just to break even.
# While this may suit the needs of Caisse, some companies need money now to fund mine operations and the like. Those companies do not want their money tied up for years.
# "Most noteholders [still] don't know what they're holding."
# Uncertainty over the frozen $40-billion ABCP is spilling over into the rest of the credit market in Canada, driving down demand and forcing companies to cancel projects because of the soaring costs of funding.

[Froggy]

даже и боюсь спросить - а почему горняцкие компании так жирно выделены?

[Mr. Trump]

даже и боюсь спросить - а почему горняцкие компании так жирно выделены?

my wild guess - к падению цен на ванкуверскую недвижимость.

а если серьезно, то эту статью надо рассматривать в связке со вчерашней акцией центробанка по поддержанию ликвидности. хе-хе - я помнится диссер писал по этим РЕПО операциям.

[Mr. Trump]

во статья в тему

[amigo]

А че за шум?
Смысл песни " кредит кранч" - в том, что рассовали чужие,обеспеченные кусками фанеры, долги по всему миру
Никто не отмажется

[oblom]

The Associated Press is reporting Pension Fund Sues Moody's Over Ratings.

In a lawsuit filed in federal court in Manhattan, the Teamsters Local 282 Pension Trust Fund alleged the New York company's ratings of bonds backed by subprime mortgages -- including bonds packaged as collateralized debt obligations -- were materially misleading to investors concerning the quality and relative risk of those investments.

"Moreover, even as a downturn in the housing market caused rising delinquencies of the subprime mortgages underlying such bonds, Moody's maintained its excessively high ratings, rather than downgrade the bonds to reflect the true risk of owning subprime-mortgage-backed debt instruments," the lawsuit says.

blaming game

[oblom]

meanwhile in US

The Federal Reserve executed a whopping $38 billion in repos this morning. Apart from the size, the most amazing thing is that they took $22 billion in mortgages as collateral. Perhaps I was wrong when I said the Federal Reserve would not wreck its balance sheet in attempting to reflate the economy. This is truly stuff of a Banana Republic.

[oblom]

one more:

The Bank of Canada injected almost $1-billion into money markets yesterday, a stark reminder that all is not right in Canada's credit market.

Just two days after Bank of Canada Governor David Dodge declared that "the overnight market is now well on its way back to normal operations in Canada," the bank found itself having to defend its key interest rate with one of its largest cash injections to date.

The central bank also increased the amount that it leaves in its settlement system to allow for easy money transfers between banks. It has set aside $300-million, instead of the $150-million target of the past few weeks, and the $25-million during normal market conditions.