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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Think4Yourself who wrote (109149)3/11/2008 7:18:16 PM
From: MulhollandDriveRead Replies (2) of 306849
 
people keep saying this doesn't expand the fed balance sheet because it's basically a 'swap'

well true enough....

but the crap that is being 'swapped' had absolutely NO BID until the fed stepped in to say ok, let's accept the AAA rated stuff and will call it the 'markIT'

for now

will it work in the longterm? jury is out....so far the $h@t sandwiches on the balance sheets had no takers....does this really change the valuation or does this maneuver just postpone the inevitable...

we'll see

<edit>

btw, i've been reading some interesting comments about the dollar reaction to today's fed action....some folks are suggesting that the fed has finally got religion wrt the USD$ and the inflation impact with this continuous, mindless easing ....the thought being that the fed will not lower the .75 basis point that is currently baked in and will become more hawkish on inflation (or at the very least, not completely oblivious to the falling dollar)...so on that level at least i would agree that the fed is trying to target the problem directly, but i'm in the camp that ultimately the market needs to clear and the fed is just prolonging the process with it's ever increasing interventions
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