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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 414.48+0.7%Jan 9 4:00 PM EST

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To: carranza2 who wrote (30592)3/8/2008 10:36:42 AM
From: Riskmgmt  Read Replies (1) of 219213
 
>>It's a bit complicated<<

No kidding. It makes my head spin trying to figure it all out.
But I am doing my best to keep up with you, TJ and others here, who seem to know, much more than I, how these things work.

I follow this>>The Fed is letting the banks borrow short from the TAF on questionable collateral and get some nice solid long term Treasuries that can be loaned to the Public at 9x the amount or 90 billion.<<
my question is, what incentive do the banks have to lend that 90 billion out in mortgages, assuming that they are loaded to the gills with non-performing mortgage backed paper now? I can see how collectively they could put liquidity back in the RE market but how can the FED ensure that they don't continue to do as they have been doing, avoiding that area?
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