Fannie Mae and Freddie Mac.

damnyanks

ML Bought
Leh chapter 11
AIG Major concerns
WAMU off the map

Train crash is for sure - lets just rip this bandage off good and quick

SoCal90046

Here's a simply stunning statement from the Federal Reserve Board

The Federal Reserve Board on Sunday announced several initiatives to provide additional support to financial markets, including enhancements to its existing liquidity facilities.

“In close collaboration with the Treasury and the Securities and Exchange Commission, we have been in ongoing discussions with market participants, including through the weekend, to identify potential market vulnerabilities in the wake of an unwinding of a major financial institution and to consider appropriate official sector and private sector responses,” said Federal Reserve Board Chairman Ben S. Bernanke. “The steps we are announcing today, along with significant commitments from the private sector, are intended to mitigate the potential risks and disruptions to markets.”

“We have been and remain in close contact with other U.S. and international regulators, supervisory authorities, and central banks to monitor and share information on conditions in financial markets and firms around the world,” Chairman Bernanke said.

The collateral eligible to be pledged at the Primary Dealer Credit Facility (PDCF) has been broadened to closely match the types of collateral that can be pledged in the tri-party repo systems of the two major clearing banks. Previously, PDCF collateral had been limited to investment-grade debt securities.

The collateral for the Term Securities Lending Facility (TSLF) also has been expanded; eligible collateral for Schedule 2 auctions will now include all investment-grade debt securities. Previously, only Treasury securities, agency securities, and AAA-rated mortgage-backed and asset-backed securities could be pledged.

These changes represent a significant broadening in the collateral accepted under both programs and should enhance the effectiveness of these facilities in supporting the liquidity of primary dealers and financial markets more generally.

Also, Schedule 2 TSLF auctions will be conducted each week; previously, Schedule 2 auctions had been conducted every two weeks. In addition, the amounts offered under Schedule 2 auctions will be increased to a total of $150 billion, from a total of $125 billion. Amounts offered in Schedule 1 auctions will remain at a total of $50 billion. Thus, the total amount offered in the TSLF program will rise to $200 billion from $175 billion.
The Board also adopted an interim final rule that provides a temporary exception to the limitations in section 23A of the Federal Reserve Act. It allows all insured depository institutions to provide liquidity to their affiliates for assets typically funded in the tri-party repo market. This exception expires on January 30, 2009, unless extended by the Board, and is subject to various conditions to promote safety and soundness.

It's stunning in that the Fed is now playing with its own balance sheet. To borrow from the Fed, banks need to be a going concern and also need AAA collateral. It seems that this requirement is being weakened, even if they're still focused on the best of all possible assets.

I have to imagine that this move, more than any we have seen to date, will affect not only the dollar but the credit rating for the US. Of course, the Federal Reserve isn't part of the government, but as the central bank, its actions have major impact on the financial condition of the US and how the US is viewed at home and overseas.

SoCal90046

damnyanks wrote: »

ML Bought
Leh chapter 11
AIG Major concerns
WAMU off the map

Train crash is for sure - lets just rip this bandage off good and quick

The Merrill Lynch transaction is actually a pooling of interest rather than a merger.

AIG has much more than major concerns. It shows how bad things are when a private equity firm has the nerve to insist that the Federal Reserve provide a bridge loan as part of a plan to avoid a ratings downgrade.

Lehman isn't officially in Chapter 11 yet, at least it hasn't been announced, but employees are removing their things from the building. What I am hearing is that the holding company will enter Chapter 11, but some of the other entities will not. I think banks are probably being pretty rational here and playing chicken: why step in and buy Lehman now rather than wait and see if the prices decline some more. Better yet, wait and see if you can get either the Fed or the Treasury to backstop the deal!

SoCal90046

I am surprised that I am not hearing that Lehman filed for bankruptcy before midnight Eastern Time. There was an 11:59 p.m. Eastern Time limit set by the International Swaps and Derivatives Association for Lehman has filed for bankruptcy otherwise the trades placed this afternoon would be canceled.

SoCal90046

Well, Lehman has announced plans to file for bankruptcy. I guess it's technically not filing as most people are saying, but expressing the intent to file.

damnyanks

A company of Lehmans size going bust isnt that quick to unwind. They will have to sell the good assets to back up their obligations everywhere. Trading suspended on LEH

ML are being made private last I heard and will form BOFA (As I said - banks need government insured deposits - US and Germany main ground for this)

The real question is how long will this keep going on.

I reckon Goldmans and Morgan Stanley are going to get bitch slapped regardless of how well they perform simply because of their leverage

Économiste Monétaire

This is a very exciting time I must admit. I thought the Treasury would pull out something at the last minute - I'm still astonished and await, impatiently, the sequel.

damnyanks

I know - I think the pubs should be advertising the big crash on the big screen. I got a coffee by LEH - lots of press there. Half tempted to try and spread rumours hah.

So RBC (Canada) and Barclays are both on the market for any cheap deals.

BenjAii

I'm reminded repeatedly in the current events of the phrase "A billion here, a billion there, and then you start talking real money", except we should probably adjust to trillions now to update the phrase.


This from The Economist

Even if markets can be stabilised this week, the pain is far from over—and could yet spread. Worldwide credit-related losses by financial institutions now top $500 billion, of which only $350 billion of equity has been replenished. This $150 billion gap, leveraged 14.5 times (the average gearing for the industry), translates to a $2 trillion reduction in liquidity. Hence the severe shortage of credit and predictions of worse to come.

Indeed, most analysts think that the deleveraging still has far to go. Some question how much has taken place. Bianco Research notes that while the credit positions of the 20 largest banks have fallen by $300 billion, to $1.3 trillion, since the Fed started its special lending facilities, the same amount has been financed by the Fed itself through these windows. In other words, instead of deleveraging, the banks have just shifted a chunk of their risk to the central bank. As spectacular as this weekend was, more drama is on the way.





Someone else made the point here that The US and its AAA rating is the ultimate "too big to fail", but just how much sub-par debt can you add to the national debt and still be the worlds safest sovereign debtor, or is the above all explained away by just being normal short term lending to banks.

SoCal90046

UCD_Econ wrote: »

This is a very exciting time I must admit. I thought the Treasury would pull out something at the last minute - I'm still astonished and await, impatiently, the sequel.

I am with you. I think yesterday was simply stunning.

Aside from commentators on CNBC and the Journal, I don't get a sense that what happened yesterday, September 14, 2008, has hit home with people in the US. In my opinion, yesterday we witnessed the single most significant event on Wall Street since the Great Crash of 1929. It's stunning that two companies of the caliber of Merrill Lynch and Lehman Brothers should, for want of a better term, disappear. I am reeling at the announcement of the Federal Reserve that they have relaxed their standards for collateral. However, what is just stunning is not only would someone actually ask the Federal Reserve for a bridge loan--and to add insult to injury, an entity that is outside of the regulatory purview of the Board--but that the request was not only considered, but is now being acted upon.

What do these actions mean? I don't wish to be alarmist, but these actions mean that the financial system is in serious jeopardy. Perhaps in four or five years, when we look back at the events of the past few weeks, we will be stunned at how close the entire system came to a complete collapse. The ticking time bomb was and is the synthetic collateralized debt obligations that are tied to credit default swaps. These entities are the today's equivalents of the lead character in a Greek Tragedy: powerful and pleasing when times are good; pernicious and toxic when things turn bad.

What is also clear is that a monetary approach to this problem isn't working; I suspect Congress is going to have to move in and offer a fiscal solution--or at best a salve. What Congress has to do is to jumpstart the housing market, which is no mean feat considering that everyone who wanted a house got one. I suspect that they're going to have to play with taxes in some way. Perhaps in a fashion where the Federal Budget won't be hit for five plus years. If housing prices continue to soften--and I am conflicted about this one, because I have waited for five years for this problem to happen, but now it's hurting the long-term financial strength of the US and other industrial economies, so there needs to be a turnaround--then more banks will fail.


Back to my first point. If it hasn't hit home yet--and things moved so quickly that it takes time for the significance to resonate--yesterday was a simply momentous day.

SoCal90046

BenjAii wrote: »

I'm reminded repeatedly in the current events of the phrase "A billion here, a billion there, and then you start talking real money", except we should probably adjust to trillions now to update the phrase.


This from The Economist

Even if markets can be stabilised this week, the pain is far from over—and could yet spread. Worldwide credit-related losses by financial institutions now top $500 billion, of which only $350 billion of equity has been replenished. This $150 billion gap, leveraged 14.5 times (the average gearing for the industry), translates to a $2 trillion reduction in liquidity. Hence the severe shortage of credit and predictions of worse to come.

Indeed, most analysts think that the deleveraging still has far to go. Some question how much has taken place. Bianco Research notes that while the credit positions of the 20 largest banks have fallen by $300 billion, to $1.3 trillion, since the Fed started its special lending facilities, the same amount has been financed by the Fed itself through these windows. In other words, instead of deleveraging, the banks have just shifted a chunk of their risk to the central bank. As spectacular as this weekend was, more drama is on the way.


Someone else made the point here that The US and its AAA rating is the ultimate "too big to fail", but just how much sub-par debt can you add to the national debt and still be the worlds safest sovereign debtor, or is the above all explained away by just being normal short term lending to banks.

If you add sub-par debt to the national accounts it would, of course, affect the credit.

I don't believe any nation is too big to fail. Having said that, sub-par debt hasn't been added to the US federal accounts. Fannie and Freddie are off book items; they also have good assets to back their debt. In fact, if the implicit guarantee always existed, then an argument could be made that both these GSEs should always have been part of the national accounts. I just dug through the archives of the Economist and its an argument made in that publication.

Overnight lending to banks is carried out by the Federal Reserve which isn't part of the government. The Federal Reserve has relaxed its standards from what kind of collateral it accepts; it's a stunning move really, which impacts the quality of the balance sheet of the central bank. It doesn't have any impact on the budget or the national debt directly--only to the extent that the Fed buys US Treasuries. Overall, however, I agree with the sentiment that it is a move that could have a deleterious affect on the credit-worthiness of the US.

I think that the next chapter in this saga will involve the Congress.

I also expect that in 2009 the first thing Congress will do is to work on legislation to provide better oversight on Wall Street.

Économiste Monétaire

SoCal90046 wrote: »

I am with you. I think yesterday was simply stunning.

Aside from commentators on CNBC and the Journal, I don't get a sense that what happened yesterday, September 14, 2008, has hit home with people in the US. In my opinion, yesterday we witnessed the single most significant event on Wall Street since the Great Crash of 1929. It's stunning that two companies of the caliber of Merrill Lynch and Lehman Brothers should, for want of a better term, disappear. I am reeling at the announcement of the Federal Reserve that they have relaxed their standards for collateral. However, what is just stunning is not only would someone actually ask the Federal Reserve for a bridge loan--and to add insult to injury, an entity that is outside of the regulatory purview of the Board--but that the request was not only considered, but is now being acted upon.

What do these actions mean? I don't wish to be alarmist, but these actions mean that the financial system is in serious jeopardy. Perhaps in four or five years, when we look back at the events of the past few weeks, we will be stunned at how close the entire system came to a complete collapse. The ticking time bomb was and is the synthetic collateralized debt obligations that are tied to credit default swaps. These entities are the today's equivalents of the lead character in a Greek Tragedy: powerful and pleasing when times are good; pernicious and toxic when things turn bad.

What is also clear is that a monetary approach to this problem isn't working; I suspect Congress is going to have to move in and offer a fiscal solution--or at best a salve. What Congress has to do is to jumpstart the housing market, which is no mean feat considering that everyone who wanted a house got one. I suspect that they're going to have to play with taxes in some way. Perhaps in a fashion where the Federal Budget won't be hit for five plus years. If housing prices continue to soften--and I am conflicted about this one, because I have waited for five years for this problem to happen, but now it's hurting the long-term financial strength of the US and other industrial economies, so there needs to be a turnaround--then more banks will fail.


Back to my first point. If it hasn't hit home yet--and things moved so quickly that it takes time for the significance to resonate--yesterday was a simply momentous day.

I agree, I get the sense that news agencies aren't projecting, at least this side of the pond, the true gravity of what has happened/is happening. A quote I heard being bandied around was, "of course, this has no effect on the average person on the street." Hardly fitting as Lehman and Merrill Lynch have been vaporised (slight exaggeration, but I'm of an excitable disposition, at the moment) in the last 24 hours. But, they don't want to be seen to be scaremongering.

The question is, who will be next? WaMu seems to be the favourite, from reading here. Exciting times.

daveirl

This post has been deleted.

damnyanks

UBS have retail and huge private client network... not to mention all that nazi gold (Joke... or is it!) so I reckon at the least they wont go bust.

Talking to my ex colleagues they are all freaking out and checking client exposure. By the sounds of it a lot of margin calls are being made which will dry more funds up. By the sounds of it we're right back to where we were 12 months ago.

SoCal90046

UCD_Econ wrote: »

I agree, I get the sense that news agencies aren't projecting, at least this side of the pond, the true gravity of what has happened/is happening. A quote I heard being bandied around was, "of course, this has no effect on the average person on the street." Hardly fitting as Lehman and Merrill Lynch have been vaporised (slight exaggeration, but I'm of an excitable disposition, at the moment) in the last 24 hours. But, they don't want to be seen to be scaremongering.

The question is, who will be next? WaMu seems to be the favourite, from reading here. Exciting times.

It could be WaMu or perhaps Sovereign Bank. The worse thing that could happen (well not the worse, but something pretty bad) is if the Fed were to lower interest rates tomorrow. It would signal that the Fed is willing to trade inflation for recovery--and there's no guarantee of a recovery. Interestingly, the CPI comes out tomorrow too. Who wrote this novel! Letting a big bank fail so that the person-on-the-street gets the message would help shift responsibility to Congress. A bank with 2,300 branches can send a signal. WaMu claims that it's solvent and it's numbers aren't that bad for someone in intensive care, but it did get into the Alt-A business close to the peak; it has exposure in some of the worst markets; it will face liquidity issues if housing prices decline and there are more foreclosures. So, my bet is on WaMu. It would be hard to top what happened yesterday and the last few Sundays have supported an adage I hear repeatedly here in LA from those in "the industry": the sequel is always worse!

SoCal90046

damnyanks wrote: »

UBS have retail and huge private client network... not to mention all that nazi gold (Joke... or is it!) so I reckon at the least they wont go bust.

Talking to my ex colleagues they are all freaking out and checking client exposure. By the sounds of it a lot of margin calls are being made which will dry more funds up. By the sounds of it we're right back to where we were 12 months ago.

That's Nazi gold--a proper noun--show some respect!

BenjAii

Both AIG & WaMu have had their ratings downgraded, WaMu to junk.

AIG which started yesterday needing $40 billion, seemed to be looking for $75 bn by the end of the day, and that was before the downgrade.

The Federal Deposit Insurance Board may not have the cash to cover its obligations to cover the first $100k of deposits at WaMu, but I can't see the Americans letting a deposit bank go to the wall, or can they ?

damnyanks

Goldmans and JP Morgan are meant to be behind a 75bill syndicate for AIG hopefully that pulls through.

Goldman announce earnings later today. If its good news it will bring a very positive spin into the markets.

AIG have some very good liquid assets but are unwilling to sell it as they feel they lose out in the long term. In business school the leaders of the future are taught to think long term - this is what AIG are doing. Sadly the very short term shows them going bust.

CEO at LEH is looking at criminal charges. Rumour on the street is that he had been various offers but insisted on independence. There offices in London are still open and have a lot of foot traffic.

Barclays are now on the scene looking to buy LEH assets on the cheap.

SimpleSam06

SoCal90046 wrote: »

What Congress has to do is to jumpstart the housing market, which is no mean feat considering that everyone who wanted a house got one.

The housing market is dead as disco. The Subprimes might be out of the way, but the Alt-As and Primes are coming up next, and they won't be leaving anyone standing.

You have all these people with a good credit record, and even fully checked-out borrowers who took nice IO-loans to leverage assets way beyond their weight, unfortunately for them the IO-portion of the mortgages are about to expire, so you can look forward to a tidal wave of defaults in 2009 and beyond.

This party is just getting started.

BenjAii

According to the NY Times, its looking like it may be bankruptcy for AIG .......

http://dealbook.blogs.nytimes.com/2008/09/16/industry-efforts-to-rescue-of-aig-said-to-falter/

SoCal90046

SimpleSam06 wrote: »

The housing market is dead as disco. The Subprimes might be out of the way, but the Alt-As and Primes are coming up next, and they won't be leaving anyone standing.

You have all these people with a good credit record, and even fully checked-out borrowers who took nice IO-loans to leverage assets way beyond their weight, unfortunately for them the IO-portion of the mortgages are about to expire, so you can look forward to a tidal wave of defaults in 2009 and beyond.

This party is just getting started.

The Alt-A's have already caused problems for companies like IndyMac Bank and, frankly, WaMu.

The prime market is a different animal. It's not in trouble to the same extent. As you said, where the problem lies is with people who have a good standard mortgage, but who have gone out and got an equity line of credit on the residual value in their homes. However, the majority of people who did take this route have the ability to pay these loans back. I just don't see serious problems in the prime real estate market.

I agree that there will be more problems into 2009; however, I can't imagine Congress standing by and not providing some fiscal stimulus.

SoCal90046

BenjAii wrote: »

According to the NY Times, its looking like it may be bankruptcy for AIG .......

http://dealbook.blogs.nytimes.com/2008/09/16/industry-efforts-to-rescue-of-aig-said-to-falter/

It's all over the news today. A liquidation of AIG could be very serious; however, I don't see how the US economy can get out of this debacle without taking it on the chin. It's time for one of the big ones to fall. The Treasury and the Fed are fighting against the tide: they're trying to separate hangovers and binge drinking; one follows the other.

SimpleSam06

SoCal90046 wrote: »

The prime market is a different animal. It's not in trouble to the same extent.

Well

SoCal90046 wrote: »

If the US government were to assume complete control over Freddie and Fannie--something which is extremely unlikely to happen

Good luck with that.

SoCal90046

SimpleSam06 wrote: »

Well


Good luck with that.

At the time it was unlikely. Both Fannie and Freddie have strongly performing assets. The balance sheets are good--relatively speaking. The problem they faced is one of liquidity; things went fast south. The assets themselves are sound.

Here's the entire post; it gives the context for the snippet you quoted.

SoCal90046 wrote: »

There are some inaccuracies in your post. The statement that the mortgage giants are the on the verge of insolvency is not really accurate--at least, there's no evidence to support the claim right. Both companies were adequately capitalized. The problem was what would happen if the company had to raise more capital. The stock prices were in free fall, so the equity markets--a traditional route--is unavailable. The move by the Treasury Department was an effort to shore up confidence in the banking system, particularly in the wake of what happened to IndyMac Bank. Neither Freddie nor Fannie was on the verge of insolvency when the Treasury Department acted, but there were genuine concerns that if the current climate in the financial markets continued, then both companies could be in trouble.

There is also no evidence to support the claim that the companies will need an infusion of several billion dollars. Unlike IndyMac Bank or Countrywide Financial which dealt in Alt-A and subprime mortgages respectively, the Macs deal with traditional mortgages. The future extent of the current mortgage problem is a matter for speculation; no one really knows how severe the problem could be. There will be write downs, but it remains to be seen what the ultimate extent of this problem will be.

Finally, the US national debt is about $7.5 trillion or about 36% of GDP. Only one quarter of the national debt is financed by foreign entities. The US government holds most of the debt itself: most of these holdings are for savings programs such as social security. In the US, individual investors, state and local governments, banks and insurance companies, etc. hold the rest of the debt--three quarters of the national debt is financed by Americans or US companies or other entities.


If the US government were to assume complete control over Freddie and Fannie--something which is extremely unlikely to happen--it wouldn't make any difference if the debt were officially transferred to the Treasury. There is an implicit guarantee that the government will back both entities--in essence, the government has been on the hook for the debt all the time. Unlike the current debt, the notes that the banks--Freddie and Fannie--hold are backed by hard assets. This debt is not in the same league.

SimpleSam06

SoCal90046 wrote: »

At the time it was unlikely. Both Fannie and Freddie have strongly performing assets. The balance sheets are good--relatively speaking. The problem they faced is one of liquidity; things went fast south. The assets themselves are sound.

Yes, thats why the US government declared them a threat to the national economy, fired the directors, and took over the companies. Or maybe the assets they are backing aren't quite as sound as some would like us to believe.

SoCal90046 wrote: »

Here's the entire post; it gives the context for the snippet you quoted.

What do you think that changes, exactly?

SoCal90046

There's a story appearing on the wire that claims that AIG is going to get a government backed bridge loan for between $80 and $90 billion; pretty shocking stuff.

SoCal90046

SimpleSam06 wrote: »

Yes, thats why the US government declared them a threat to the national economy, fired the directors, and took over the companies. Or maybe the assets they are backing aren't quite as sound as some would like us to believe.


What do you think that changes, exactly?

Sounds like nothing.

If you make a claim, for example, that there are problems in the prime mortgage market, I'm calling for you to back it up. Now if it's a hunch or personal opinion, that's fine. If it's true that there are systemic problems in the prime mortgage market, I want to know. I have no vested interest in believing things that aren't factual. I don't accept opinions without some kind of rational argument to back them up.

When the Treasury first took action on Fannie and Freddie right after IndyMac was seized, there wasn't evidence that companies would be placed in conservatorship. In fact, until Congress passed the Housing and Economic Recovery Act and it was signed into law by the President, there wasn't a lot the government could do barring some sort of major liquidity crisis.

In the quote to which you refer, I simply said that there wasn't evidence to back up the idea that the government would assume, essentially, ownership of Fannie and Freddie. The evidence wasn't there, at least none that I could find.

SimpleSam06

SoCal90046 wrote: »

Sounds like nothing.

If you make a claim, for example, that there are problems in the prime mortgage market, I'm calling for you to back it up.

Hrm. And here it is on the first page of google.

Among subprime borrowers, severe delinquencies — a measure that includes 90+ day delinquencies and foreclosures — increased from 14.44 percent of loans in the fourth quarter to 16.42 percent in Q1. In contrast, just 1.99 percent of all prime borrowers were severely delinquent at the end of Q1, compared to 1.67 percent at the end of last year, numbers that illustrate the relatively greater distress felt by subprime borrowers.

But it’s the velocity of these changes that’s most worth noting from an investor’s perspective — the Q4 to Q1 change in severe delinquencies strongly favors prime borrowers, for example, with severe DQs increasing by 19.2 percent for prime and 13.7 percent for subprime borrowers.

By splitting out fixed-rate and adjustable-rate DQs, the increasing distress now being felt by prime borrowers becomes even more evident: prime ARMs showed the highest velocity of change of any major loan category in nearly every measure of distress published by the MBA. Severe delinquences increased a whopping 28.71 percent among prime ARMs during Q1, while in comparison, subprime ARMs saw severe DQs jump 18 percent.

It’s a pattern repeated outside of ARMs, too. The velocity of severe delinquencies among prime, fixed-rate borrowers actually came close to doubling that recorded by subprime FRMs during the first quarter. Prime FRMs saw severe DQs increase 12.1 percent in the first quarter, while subprime FRMs posted a 6.7 percent increase in severe delinquencies over the same time frame.

Keep in mind there are a hell of a lot more primes than subprimes.

SoCal90046 wrote: »

In the quote to which you refer, I simply said that there wasn't evidence to back up the idea that the government would assume, essentially, ownership of Fannie and Freddie. The evidence wasn't there, at least none that I could find.

Eppur si muove. In my opinion you should give more careful thought before making bold statements like that. Alternately we could meet back here in a couple of years and discuss the prime mortgage market then.

SoCal90046

SimpleSam06 wrote: »

Hrm. And here it is on the first page of google.

We're talking about two different things. If read what you wrote correctly, and there are many ways to interpret it, I inferred that the prime mortgage problems could be as significant as the subprime. In fairness the statement "Primes are coming up next, and they won't be leaving anyone standing" isn't well defined and open to interpretation. It's clear to me that you were hinting at serious problems for the prime market. What I am not saying is that the prime market is immune: it's not. But, I don't see evidence today to suggest that it will have problems on the scale of either the Alt-A or subprime markets.

SimpleSam06 wrote: »

Keep in mind there are a hell of a lot more primes than subprimes.

There certainly are many more prime than either subprime or Alt-A mortgages. Most are over half paid off.

SimpleSam06 wrote: »

Eppur si muove. In my opinion you should give more careful thought before making bold statements like that. Alternately we could meet back here in a couple of years and discuss the prime mortgage market then.

Thanks for the advice!

SimpleSam06

SoCal90046 wrote: »

But, I don't see evidence today to suggest that it will have problems on the scale of either the Alt-A or subprime markets.

There certainly are many more prime than either subprime or Alt-A mortgages. Most are over half paid off.

And now its my turn to ask you to back up your statements.

SoCal90046 wrote: »

Thanks for the advice!

You're quite welcome, and even more so if you could refrain from financial advice until such time as the issue is resolved.