I don't know this much about this subjec,t but how would the fed go upon getting more money? Is it difficult or just as easy to call the paulson for get some?
First of all, ins't the total number $400 billion: $300 billion in TAF and $100 billion in some other invented scam. I honestly think it would be easier if Ben got in his helicopter and droped hundreds by the pound.
no actually i was not kidding. I was hoping someone could explain this. How the fed could use all its liquity" by using 200 of 800 million yet has no access to get anymore money. (im not talking about the Treasury market) I guess im not as intelligent as yourself. I was hoping instead of you pointing it out to everyone, you could actually answer the question. Thanks
The FED can print as much money as they need; we are no longer on the gold standard. One way to do this is to buy Treasuries. In this case, the FED is "swapping" treasuries for "unpricable" mortgage-backed securities. So, in other words, junk CDO's etc are being transferred from financial institutions to the FED. The FED will, of course, attempt to collect on these instruments, but the GOVT is the only entity that can handle the loss. In the words of FDR, the FED is rescuing and providing relief to the financial institutions. The GOVT and the FED are providing relief to the public with the stimulus package and lower short-term interest rates. The financial institutions, with the FED's help, can attempt to rescue some of the homeowners facing foreclosure (not the investors, flippers, etc). The GOVT has yet to introduce reform measures. Some already in place by financial instituions: tougher requirements to secure credit; negotiations with homeowners either in foreclosure or on the brink. The dilemma is refinancing to fixed rates from the ARM's. Appraisals are coming in too low to allow refinancing. I believe that the financial institution should allow anyone with an ARM to "convert" to a fixed rate, 30-year mortgage, at no charge to the borrower. The lenders will save billions. This is an adequate rescue/relief plan for the public. Just my $0.02.
Once again totally incorrect. Good to see how many 'elitetraders' have no clue how their central bank works.