The Fed will lend to banks $200 billion each and every month?

Discussion in 'Economics' started by crgarcia, Mar 12, 2008.

  1. The Fed loans are for 28 days.
    Obviously banks will not solve their subprime and credit card defaults in a single month.

    So, we can actually expect the Fed to lend and lend over and over again?
  2. Yes. It's in the press release that it will continue for "as long as needed."

    On a related NOTE, the TAF auctions I think have become a permanent tool of the fed. It's listed right along the fed funds rate.

    This was to counter the critics that the fed was running out of bullets... They just created two more powerful monetary tools our of thin air: one which exchanges federal t-bills for subprime slime which and has a theoretical limit of $800 billion. And the TAF which exchanges fiat dollars for subprime slime, which has NO limit!

    The fed has put down the gun and has shown the world that they posses and will use nuclear weapons.

    Don't fight the Fed. :D
  3. the Fed has almost unlimited supply and power to create and distribute.

    Remember this when trying short the world.
  4. Does that make much sense? So everytime the market goes into a correction or brief Bear Market and new market leaders forge their way to the front we can't expect to make $$$ from short positions, because the Fed/PPT will jump in and affect the normal process?

    Why can't markets correct and money be made with short positions without the world falling apart with every 15-30% decline?

    Where is the reasoning in that? But this last year they've pulled out all stops to "protect" the market from a normal, healthy drop.

    As far as I know, people will still innovate, create companies, work to grow profits and generally mold and adapt to given situations and improve upon them. That is the way of business.

    I've noticed that with each market decline for the history of it, new highs eventually are forged and will always be (barring an act of God).

    So who really cares if we capitulate and weaker players are replaced by better, nimble ones? Obviously some very powerful people with their own agenda.

  5. It's called drift brotha

  6. What can I say. Don't fight the fed.

    Long anything inflationary, short anything fiat.
  7. Weaker players huh? The weaker players are the moms & pops of the world. The middle class age 45+ who have their retirement fund in these bank stocks. What would happen to them? Oh you dont care? Lets have a history lesson then. 1929. Great Depression. Rampant crime. And who are these middle class old folks going to steal from...Oh i know...the guy that made millions from shorting the stocks they owned. Only problem with that is that one of them may kill you to get that money.

    Fed is doing you a favor even if you cant see it. They are protecting you from the 85 year old man with a hand gun, with no money and nothing to lose by killing you so he can get a few bucks to feed himself that day.

    On the other thing you said about people will always forge ahead and create companies...where they going to get the money? They have to take care of mom & dad now. Look at every country in the world where the children have to send money home to their families to survive. How much do they innovate? You think thats a coincidence? Saving us from the credit crisis is the best thing for everyone in the long run. Even the big players.
  8. Eventually you have to pay the piper.

    I like what you said about kids sending money home to take care of families.

    That is one reason this current economic "situation" is so bad.

    It used to be that dad worked and mom stayed home.
    Then mom began to work, as well.
    Now kids are taking care of their parents and families.

    Who's left to employ to cope with all this inflation?

    We are in an interesting situation indeed!!

    Where is all this money going to come from?

    Sure you can print and lend all you want but I refer to my first sentence....
  9. I vote this as post of the YEAR.
    Excellent analysis.
  10. inflate or die.
    #10     Mar 12, 2008