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Concerning the Warren Buffet offer: I watched part of the US House
inquiry on LTCM on CSPAN. The NY Fed president testified to the
committee that the Warren Buffet offer could not be accepted by LTCM
because of restrictions in their bank loans. The New York Fed
president was involved closely with dealing with LTCM's problems and
held the meeting that led to the bailout of LTCM.
FYI I explain below is the informal monitoring process the NY Fed
president testified to at that hearing that led to the bailout of
LTCM, as best I recall it from the hearing:
The NY Fed President said he routinely contacts the major banks and
brokerages on days when the markets are unusually volatile.
(Possibly he said just the banks or brokerages in his region - cannot
remember). He inquires about any problems the bank or brokerage is
having in clearing or any other major problem, and whether they have
heard rumors of any major problems elsewhere.
Although he had heard isolated rumors about LTCM before, one day when
he was making his routine inquiries 10 major banks or brokerages all
reported they were hearing rumors about LTCM. He then contacted all
the major lenders to LTCM and a meeting was held in the offices of the
NY Fed. The NY Fed President said no public money was used in the
bailout.
--- Chris
-----Original Message-----
From: alan myers <a.myers@xxxxxxxxxxxx>
To: HBernst963@xxxxxxx <HBernst963@xxxxxxx>
Cc: omega-list@xxxxxxxxxx <omega-list@xxxxxxxxxx>
Date: Friday, October 09, 1998 9:52 AM
Subject: Re: next emerging country in crisis : USA.... NOT
|Howard,
|
|Thanks for clearing that up. When I read that my first thought was
that you have
|brokers and banks losing millions then suddenly, out of nowhere,
unsubstantiated
|and on the net, the ol' Warren Buffet rumor. Coincidence? I think
not. Reminded
|me of Bre-X.
|
|A.M.
|
|HBernst963@xxxxxxx wrote:
|
|> Warren Buffett did not offer to buy 100% of Long Term Capital. He
was asked to
|> buy in to it and he, being the smart investor that he is, refused.
That's why
|> the Fed had to strong arm the banks to buy LTC.
|>
|> As for sales, retail sales are now tanking. Many companies have
announced
|> layoffs in the last few days. Banks are cutting back on credit
rapidly.
|> Caution is warranted.
|>
|> Howard
|
|