In ES Browning’s WSJ
stocks report today, he mentions something I haven’t seen anywhere else:
Traders pointed to several culprits for the stock pullback: warnings from
Bank of America and Wachovia of more credit-loss provisions to come, a gloomy-sounding
comment from Canada’s central bank governor, rumors of more write-downs at
other financial institutions, surging oil prices and a comment from
the Federal Reserve that its new bailout program wouldn’t be available to
investment banks.
Let’s not get into the question of whether the Fed’s new facility is a bailout
for the time being. The big question is: why on earth isn’t it available to
investment banks? And where can I find this comment?
The policy certainly seems weird to me, since many of the biggest investment
banks (JPMorgan, UBS, Deutsche, Citi, etc) are also commercial banks and therefore
will have access to the new facility – thereby giving them what seems
to be an unfair advantage over the pure investment banks like Goldman, Lehman,
and Bear. Or am I missing something here?