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The Mother Of All Bubbles, When The Debt Bubble Pops It Will Be Sudden And Rapid:Chris Martenson

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1 comment to The Mother Of All Bubbles, When The Debt Bubble Pops It Will Be Sudden And Rapid:Chris Martenson

  • rich

    U.S. regulators allow BlackRock funds to lend to one another

    BlackRock Inc (BLK.N) portfolio managers will be allowed to borrow from their peers if they are pressed for money to cash out clients, U.S. Securities and Exchange Commission officials said in a notice on Tuesday.

    Mutual funds and money-market funds offered by the world’s largest asset manager could borrow up to a third of their assets in total – or up to 10 percent of assets without posting collateral – through BlackRock’s “InterFund Program.”

    BlackRock last year asked the regulatory agency to let the funds borrow cash from one another, for instance to meet a hypothetical spike in requests by clients to redeem shares.

    Some other fund companies already can provide similar lending, including Vanguard Group and Fidelity Investments, yet BlackRock’s request came as regulators and Wall Street are putting mutual funds’ liquidity under a microscope.

    Late last year, Third Avenue Management liquidated its near $1 billion Focused Credit Fund (TFCIX.O) as its junk-bond investments sank.

    “Interfund loans will not prevent another mess,” said Erik Gordon, a professor at the University of Michigan Ross School of Business. “They will make it tougher to sort out the mess.”

    The SEC last year proposed a requirement that U.S. funds step up planning to ensure liquidity. The rules have not been finalized.

    BlackRock, which manages nearly $5 trillion in assets, has already arranged for its funds to be able to tap outside credit lines during times of stress.

    http://www.reuters.com/article/us-blackrock-funds-liquidity-idUSKCN11C2GA

    What a Fink….

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