Friday, August 17, 2007

Morning Note...

Big news of the morning is the Fed announcement of 50bps Discount Window Rate cut.  It also said it stands ready to act “as needed.”  Lowering this particular rate does not have the effect on other rates that the Fed Funds rate would.  However, it DOES add much needed liquidity to the banking system.  This could be critical for those banks looking to manage mortgage exposure and those collared with the debt from PE deals.  The Fed’s action also helps bolster investor confidence.  Further, remember a Fed Funds rate cut still remains possible – the wording of the release hinted as much.

Futures up sharply off the lows of down nearly 100bps on last night’s Asian sell-off.  S&P futures currently up 2%.

Oil just over $72/barrel.  10 year note yields 4.72%.  

Announced Deals:  TPG to acq MEH for $450mm

Rockbay News: IP forms joint venture with Ilim Group in Russian forest area, CVS cleared by AG and SEC in options-granting investigation, UCO/HC shareholders approve merger – symbol change to EXH, Atlantic Investment reported 5.2% stake in JOYG, ARB signs a services deal with CDL, RBS raises stake in ABN Amro to 4%, FBR reiterates outperform for HCR, MHG NO upgraded at MSDW

Vito’s Trivia:  Art Cashin said this on CNBC this morning:  “…it’s when the fear of losing money finally outweighs the fear of looking stupid.”  What was he talking about?

Yesterday’s Answer:   California, by a wide margin, boasts the most fast food restaurants, followed by Texas, New York, and Florida.