The Master Liquidity Enhancement Conduit (MLEC): A Play In One Scene

Scene: Meeting between an unnamed money market manager and The MLEC (”The Entity”). Treasury Secretary Paulson is present.

MLEC: Would you like to buy some of our asset backed commerical paper?

Manager: Yes. But we’re fully invested right now. Maybe when some of our paper rolls over.

MLEC: Excellent. How much would you like to buy?

Manager: Excuse me?

MLEC: We welcome your interest in our fund. How much would you like to buy?

Manager: Oh…. uh…. $50 million?

MLEC: $500 million. Excellent.

Manager: No. I said $50, not $500.

Secretary Paulson [becoming impatient]: I’m pretty sure I heard you say $500 million. Unless it was $1 billion????

Manager: Right. Sorry. I misheard you. $500 million.

Secretary Paulson to the MLEC: Excellent. Put him down for $1 billion.

[To the room in general]: I knew investors would be interested in this market based opportunity.

[Turning to the manager]: It’s been a pleasure doing business with you.

[Paulson extends his hand and the bewildered manager shakes it].

THE END

Also see David Gaffen’s “Obey the Entity” post at the WSJ’s MarketBeat.