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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Smiling Bob who wrote (109076)	3/11/2008 1:52:44 PM
From: MulhollandDrive	Respond to of 306849

not to worry....only the highest quality, AAA collateral sez the fed from Lee Adler at Wall Street Examiner According to an official at the Fed, the mode of determining the value of the securities will be decided in the coming days before the first auction. This official, who was speaking off the record, also indicated that the collateral has to be of the highest quality, rated AAA, and here’s the more important factor in my view, not on credit watch for downgrade. If it is, it will not be accepted, and if it the collateral is downgraded during the term of the operation it would be put back to the borrower who would be required to replace the collateral. 1. Lee Adler wrote: He said that the purpose of the operation was to provide liquidity to good quality securities which cannot be moved due to market conditions. He also said that it was important that the effect of the operations were reserve neutral, that they would not affect the level of reserves in the system because they involved the swap of securities of equivalent value. This would enable the Fed to scale up the operation as necessary to accommodate the need.

To: Smiling Bob who wrote (109076)	3/11/2008 1:55:38 PM
From: Think4Yourself	Read Replies (4) \| Respond to of 306849

I felt the exact same way up until this morning. Don't get me wrong here. The economy is in a lot of trouble. Housing is in a lot of trouble. Consumers are in a lot of trouble. The banks are in a lot of trouble BUT their situation is nowhere near as dire as it was yesterday. Stocks are oversold. Everyone is incredibly pessimistic. Short interest is high. The fed has just made a very smart move (AKA a catalyst). I believe that in hindsight everyone will realize that today was the start of a market rally. Currently 50% long, 20% short, and 30% cash.