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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: MulhollandDrive who wrote (109146)3/11/2008 7:08:58 PM
From: Think4YourselfRead Replies (4) of 306849
 
The fed is taking no risk whatsoever with this move. They are buying nothing. They are only accepting AAA collateral, that isn't on credit watch, for either 80 of 85 cents on the dollar. If the securities change to no longer be AAA then they can't be rolled over.

The markets wanted in intermeeting rate cut. That would have been foolish and ineffective. The fed is addressing the liquidity problem without helping the gamblers or the mucked up companies. The companies with garbage securities will gain no benefit from this program.

For the fed this is a brilliant move. Greenspan would have given the market the rate cut.

Some people fail to understand what this is meant to do. This is meant to restore liquidity to the banks and confidence to the AAA MBS markets so those credit markets unlock. That is all it is meant to do. It doesn't bail anyone out in any way.

Please show me a downside to the program. I can't find any. It's a win-win and the taxpayers aren't on the hook for anything.
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