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FBN's Charlie Gasparino on how investors are trying to settle the markets through an enhanced liquidity fund, like the U.S. TARP plan.
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Enough massively.
European prices don't forget that still a big problem it looks to be spreading here in the US and hitting as banking stocks.
Now some major US money managers are calling for a broad solution to those problems Charlie Gasparino has exclusive details.
And what some US investors are pushing for as a solution to Europe's troubles -- -- -- -- back.
-- you know they are clear we're talking about firms like BlackRock big -- biggest money management firm.
They are clearly in the world they are clearly hitting the panic but it now and reaching out to there into what who they know when your main European leaders.
And calling for some sort of -- to support the banks in Europe right now something war.
Then the liquidity facilities that they set up last week something that they're calling an enhanced liquidity fund.
That resembles from what I understand that the initial part -- now this is pretty interest in we don't know the exact details.
But I can tell you that people at BlackRock include Larry think the CEO BlackRock is pushing for this enhanced liquidity fund and from what I understand it's along the lines.
Of that initial TARP plan.
-- initially was.
By the stuff from the banks create liquidity in these on the what why she can't because this outrageous because we -- been following the European sovereign debt crisis for over a year kicking -- can I -- that -- let me -- let me -- I can't -- -- -- -- -- to get -- are -- -- -- -- -- exactly -- but -- some way to create liquidity.
In those on the water assets that they own you know listen Greek debt Greek made of Greece may default but that stuff is gonna be -- something and when you start trading that stuff.
It's actually better for the banks and you can buy that stuff -- the banks' balance sheets and and sort of settle the markets on this and settle the banks bring the backs banks down.
The some sort of reality where everybody knows what's going on the the issue is this.
Though I will tell you that you know there's a lot of details that need to be worked out -- you know the European central bankers.
Aren't there yet but I will tell you this that major money market -- money management firms Hussein if they don't do something like this do -- TARP like bail out maybe it's.
You know injecting liquidity like money that -- that's the that's the that's how they ended up with TARP they just gave the banks money.
Maybe that's the way but if they don't do that would be a major US investors worry is that they're gonna have to nationalize these things very recent because what we have -- a run on the banks in Europe this is -- the a very difficult situation.
-- bleed over here it's bleeding -- we -- if you look at that prices.
-- US bank stocks in their stocks to get crushed because people think they have they have volume Morgan Stanley has tremendous exposure to Greece or wherever.
I will tell you this most people I talk to think that our banking system is much more sound there now years if the TARP.
But clearly in order to stop the crisis from from exploding.
They think there needs to be I'm a major effort bailout effort underway right now in BlackRock is pushing.
-- you mentioned the market clearing getting that bad assets into the marketplace because they will get kicked up well you know there's a -- it is a to know that there are still toxic assets.
That have not been picked up that are still running their course through the system from that financial crisis that we're we went to -- marked down.
However it wouldn't probably not ninety a hundred cents on a dollar that's much that's not.
That's not the issue the issue is if they're trading the trading at less than par obviously -- less -- -- if they're being held on the balance sheets of the banks if the banks are hiding it.
You know from what I understand that you know if you think about the US banks are fairly well capitalized to deal with that stuff.
Yes they relax some of the market mark mark to market rules but not all of them.
I just think the US banks are in better shape that -- that doesn't mean they won't take -- here.
But the bottom line is this this is an integrated global economy yet that's for store big US investors are pushing for a solution.
Similar to what they -- with pushing for a solution and how involved will the US have to be in it in -- TARP.
Type solution that's a great question I don't know when you listen they that's the big -- they have faith that.
The load to be feared that -- what get involved in their ballots they were not that much involved in all our stuff although we did open bank lines is fed window was open to some of the of the big banks.
I don't think we have to be involved that much I.
I'm not a bank among the Central Bank -- I don't know I can just tell you that the panic button is being hit by use investors and Hussein move -- move fast.
I will tell you this most people I talked a really smart people like Larry Fink like others.
They were tell me that this park like bailout would have occurred at the end of the year the fact that they're talking about now.
Shows the speed and severity of this European crisis and how it's hitting -- RR markets here.
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