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Minyan Mailbag: The State of State Street

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State Street has no retail franchise to draw deposits from if it needs to fund liquidity line draws.

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We encourage Minyans to read this morning's mailbag, A Bird's-Eye View of the Credit Conundrum, from a very astute and tremendously informed member of our community. This is the beauty of the 'Ville---intelligent folks with skill-sets that complement our own that watch each other's back. Minyan Peter, for his part, was the treasurer of one of the largest banks in the Midwest. Noice indeed.

As a follow-up, we'll air the following fare which he shared with us this morning after we noodled the overnight situations at Carlyle, State Street (STT), Barclays (BCS) and DBS (Singapore's largest bank). His additional thoughts? Glad you asked!

"I have been watching Europe more than the US, because that is where the liquidity problems will first appear - remember the European banks are the big back up lines for all of these CP conduits, not the US banks. It is why I have not been at all surprised that the ECB has had to be so aggressive.

The news on State Street, however, is very troubling. State Street has no retail franchise to draw deposits from if it needs to fund liquidity line draws. If the chatter on State Street is true, State Street's ability to fund through the interbank market may be the first real tell in the US as to how big a liquidity problem we have."
-Minyan Peter

On behalf of the Minyanship, we salute you.

No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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