Friday, November 7, 2008

Capital Market News

§  Dems crafting $100B stimulus plan, tax-cut package
Democrats began work Thursday on a second economic-stimulus package. The plan could include $100 billion in stimulus spending, as well as middle-class tax cuts that could be implemented as early as next year. President-elect Barack Obama is expected to discuss the plan today in his first news conference since the election. The Washington Post (11/7)

§  Real estate funds go after capital despite down economy
Opportunistic real estate investment managers are still attracting capital, even as the credit crisis continues and economic growth falters. Research from real estate fund of funds manager Clerestory Capital Partners shows that 187 funds were seeking about $155 billion in the third quarter. "Lots of real estate fund managers see potential once-in-a-lifetime investment opportunities coming," Clerestory principal and co-founder Tommy Brown said. Europe Real Estate (11/7)

§  Fed pumps additional $100 billion into commercial-paper market
The Fed's program to bring liquidity back into short-term corporate lending is showing results, with lending under the Commercial Paper Funding Facility increasing to $243 billion over the past week, from $144 billion a week earlier. Businesses and financial institutions were forced to look to the Federal Reserve for help after the traditional sources of debt, including commercial paper, dried up in the wake of the Lehman Brothers collapse. One analyst said the Fed "is tapping all the keys on the keyboard, and it does seem to be helping." (11/6)

Fed's balance sheet expands to record $2 trillion
For the first time, the Federal Reserve's balance sheet exceeds $2 trillion as the central bank continues to lend huge sums of cash to financial institutions to keep short-term funding markets alive. The Fed's balance sheet grew from $1.953 trillion Oct. 29 to $2.058 trillion on Wednesday. Banks pulled back on direct borrowing from the Fed's discount window, but the industry remains dependent on the lender of last resort. CNBC/The Associated Press (11/6)

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