A friend at UBS tells me the following:

“Bank of England officials have cancelled trips outside London. HBOS PLC stock is down 15%, could this be another run? Gordian Knot is in danger of losing it's AAA rating from S&P. It was founded by Stephen Partridge Hicks and Nicholas Sossidas - a pair that invented SIVs in the 80's.”

If this is true and I expect that it is the de leveraging process continues. We are in a crucial stage .Governments must come forth to buy paper and make markets in bonds, especially mortgage bonds.

Respectfully,
Monty Guild

http://www.jsmineset.com/

-----------------------------------------------------------------------------------------------------------------------



BOE Renews Emergency Funds as Banking Executives Meet (Update1)

By Jennifer Ryan

(excerpt)
March 20 (Bloomberg) -- The Bank of England renewed an offer of emergency short-term funds to banks as it hosted a meeting of executives to try and stem a financial crisis.

The central bank sold 5 billion pounds ($9.9 billion) of weekly money and will keep offering the extra funds each week until the current monthly financing period ends in April, it said in a statement. The offer replaces emergency loans made on March 17, which mature today.

Bank of England Governor Mervyn King has struggled to tame money-market rates as banks worldwide with losses of at least $195 billion stay reluctant to lend to each other. Today's meeting at the central bank follows HBOS Plc's drop in London trading yesterday to its lowest-ever price even after the U.K.'s biggest mortgage lender said it had ``no liquidity problems''

``It's clear from the events yesterday that conditions in the sterling money market are fragile,'' said Moyeen Islam, head of fixed-income strategy at Barclays Capital and a former Treasury economist. ``The meeting with the governor and senior members of the financial community today is important for the bank to get an understanding of the stresses they're facing.''

The Bank of England denied yesterday that it called emergency meetings about banks' funding problems. It also denied rumors that Governor Mervyn King called off a trip to Asia and that staff leave was canceled over the Easter holiday. King is still scheduled to visit Israel on March 30, the bank says.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a2vzwDfiRRs0&refer=home