October 07, 2008

The Dow industrials fell below 10000 and European stocks fell to 20-year lows, a stark sign that the crisis may be outpacing policy makers' ability to contain it.

In a bold move, the Federal Reserve Board today announced that it will buy large amounts of short-term debt in an effort to liquefy parched credit markets.

The Fed's new commercial paper funding facility will provide a vehicle that will purchase three-month unsecured and asset-backed commercial paper directly from eligible issuers.

The Department of the Treasury will make a special deposit at the Federal Reserve Bank of New York to back the facility.

The Fed said that the commercial paper market has been under “considerable strain” in recent weeks as money market mutual funds and investors have become reluctant to purchase commercial paper, especially at longer-dated maturities.
"By eliminating much of the risk that eligible issuers will not be able to repay investors by rolling over their maturing commercial paper obligations, this facility should encourage investors to once again engage in term lending in the commercial paper market," the Fed said in a statement.

Bellatore Financial Inc. of San Jose, Calif., is buying Capital Allocation and Management Inc. of Greenwood Village, Colo., and Advisor Partners LLC of San Francisco. Capital Allocation provides portfolio management and consulting services and oversees $365 million in assets. Advisor Partners is a separate accounts manager with $350 million in assets. Al Steele, Bellatore’s chief executive, said Advisor Partners gives Bellatore a separately managed account platform and Capital Allocation adds relationships with more than 120 independent financial advisers.
Advisor Partners will continue to run as a separate business with its current staff, said Dennis Clark, co-founder of Advisor Partners. “Bellatore will provide us with greater resources for growth,” Mr. Clark said. Advisor Partners chairman Andrew Rudd will join Bellatore's investment committee, Mr. Steele said.