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It’s fun with Barney and friends down in DC today
Quite a cast of characters testifying today at The House Financial Services Committee.
http://financialservices.house.gov/schedule.html
We can expect Bergabe to be touting his new TALF which was announced in November. The Fed will start making up to $200 billion in loans to juice the market for securities backed by lending to small businesses and consumers. The issuance of these securities, which gin up lending for things like auto loans, student loans and credit cards, essentially disappeared in October. This is a shot at getting it back—and helping people out there who are struggling to borrow money for cars they don’t need and college that cost way too much and also for the coming “Emergency Christmas” shopping.
Does that make you feel any better about all the other things the government has been spending money on as of late?
More and the TALF. Like a Hedge Fund or an insolvent to big to fail bank the Fed will create a special-purpose vehicle (SPV) for the TALF assets, perhaps in the Caymans since the Fed staff can then take an all expenses paid vacation with their familes there.
This SPV in the Caymans will then buy the assets securing TALF loans. The US Treasury’s (UST’s) Troubled Assets Relief Program (TARP) will then buy debt issued by the SPV to finance the first $20 billion of asset purchases.
If more than $20 billion in assets are bought by the SPV through TALF, the Fed will then print money and then lend it to the SPV.
So basically the Fed’s TALF and its SPV are FRBNY’s thing, but UST and TARP—i.e. BARF—are standing behind it just like any BFF would.
http://financialservices.house.gov/schedule.html
We can expect Bergabe to be touting his new TALF which was announced in November. The Fed will start making up to $200 billion in loans to juice the market for securities backed by lending to small businesses and consumers. The issuance of these securities, which gin up lending for things like auto loans, student loans and credit cards, essentially disappeared in October. This is a shot at getting it back—and helping people out there who are struggling to borrow money for cars they don’t need and college that cost way too much and also for the coming “Emergency Christmas” shopping.
Does that make you feel any better about all the other things the government has been spending money on as of late?
More and the TALF. Like a Hedge Fund or an insolvent to big to fail bank the Fed will create a special-purpose vehicle (SPV) for the TALF assets, perhaps in the Caymans since the Fed staff can then take an all expenses paid vacation with their familes there.
This SPV in the Caymans will then buy the assets securing TALF loans. The US Treasury’s (UST’s) Troubled Assets Relief Program (TARP) will then buy debt issued by the SPV to finance the first $20 billion of asset purchases.
If more than $20 billion in assets are bought by the SPV through TALF, the Fed will then print money and then lend it to the SPV.
So basically the Fed’s TALF and its SPV are FRBNY’s thing, but UST and TARP—i.e. BARF—are standing behind it just like any BFF would.