Assorted News

WFC recorded a noncash charge in Q3 from its total $480M Fannie and Freddie perferred stocks. The securities are trading at 5% to 10% par value.

During these credit crunch time, not only are institutions having fire sells, their brain power is also draining to other less established firms. These firms are supported by private equity investors. Likely, private equity firms extend their antes even to oil companies. They are looking for executives with 20-30 years experiences. The attraction for these executives out of large brands is that they can more focus on oil business (searching and new technology) rather than daily management and processes. This is welcome among entreprenuer type executives. This trend probably will spread to other fields regardless of motivations such as the credit crunch.

One of the key problems in credit crisis is the floating-rate notes, the securities used among banks to borrow money. Floating-rate notes had $95B mature in 09/2008. It is reported at least $787B has to be paid off by the end of 2009. That's about 43% more than they had to redeem in the previous 16 months. It is anticipated many smaller banks would have hard time to pay their shares off. FDIC provided a list of problem banks. For bigger banks and organizations, they are reportedly prepared to this big bill ahead of time. GE financial and WFC had prepared enough amount. In Europe, in the last 4 months of 2008, every month between 15B to 20B Euro will be redeemed. This is another reason of the current screeching European credit market.