Tuesday, March 11, 2008

Some Interesting Facts on the Fed Injections

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Some staggering amounts of money being used to support the global financial system; truly breathtaking when you step back and think about it. Just imagine what would happen if we actually used regulation instead.... (I know, its a 4 letter word)

Combine the following facts, with the European Central Bank's Half a Trillion in mid December and you are starting to talk real money here. We are now approaching a Trillion Dollars when you combine the US and Europe. They don't call him Helicopter Ben for nothing. All to bail out bad decisions by bankers drunk on fees from selling shoddy instruments. Again, never preventative, always reactive - Cramerica - by the corporation, for the corporation.
  • The Fed has now offered $400 billion in short-term loans to help rescue the mortgage market, including $200 billion announced Tuesday, the $100 billion from the term auction facility loans to banks, and $100 billion announced Friday in loans to primary dealers in the bond market.
  • Counting the currency swaps with the foreign central banks, the Fed has now committed more than half of its combined securities and loan portfolio of $832 billion, Crandall noted. 'The Fed won't have run completely out of ammunition after these operations, but it is reaching deeper into its balance sheet than before."
  • The Fed could also simply buy agency or non-agency mortgage-backed securities under its existing authorities, but the announcement made no mention of that option. (that's next! and where will they get the money?? Do you hear those printing presses working overtime?)

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