Worlds Largest Pawn Shop II - The Fed
Hiding the losses... Ratings companies Moody's and S&P were willing to assign AAA credit ratings to subprime-mortgage securities,
some of which are trading as low as 26 cents on the dollar.
Even after downgrading almost 10,000 subprime-mortgage bonds, Moody's and S&P have yet to cut the AAA securities in the ABX indexes used to track the debt.
Downgrades of those securities would strip bonds valued at an additional $120 billion of their top rankings.
Defering downgrades on this AAA subprime debt conceals the holding banks actual losses.
Central Banks... Bank of Canada, the Bank of England, the European Central Bank
and the Swiss National Bank all announced borrowing plans and increased currency swap lines with the Fed.
Can't touch this... The Fed announced new Term Securities Lending Facility (TSFL).
The Fed will lend up to $200 billion of Treasury securities to primary dealers secured for a term of 28 days,
borrowers will be able to pledge variety of collateral,
including AAA rated private-label and FNMA, FHLMC residential mortgage backed securities. Auctions will be held on a weekly basis.
The Fed holds about $713 billion of Treasuries on its balance sheet.
The resource allows dealers to switch debt that is less liquid for U.S. government securities that are easily tradable.
The Nattering One muses... the banks are already technically insolvent and are hiding much larger losses due to ratings company duplicity in their scam.
Now the Fed, which already accepts credit card & boat loans at the window, is going to take on the recently toxic FNMA/FHLMC MBS debt.
The Fed truly is the world's largest pawn shop.
some of which are trading as low as 26 cents on the dollar.
Even after downgrading almost 10,000 subprime-mortgage bonds, Moody's and S&P have yet to cut the AAA securities in the ABX indexes used to track the debt.
Downgrades of those securities would strip bonds valued at an additional $120 billion of their top rankings.
Defering downgrades on this AAA subprime debt conceals the holding banks actual losses.
Central Banks... Bank of Canada, the Bank of England, the European Central Bank
and the Swiss National Bank all announced borrowing plans and increased currency swap lines with the Fed.
Can't touch this... The Fed announced new Term Securities Lending Facility (TSFL).
The Fed will lend up to $200 billion of Treasury securities to primary dealers secured for a term of 28 days,
borrowers will be able to pledge variety of collateral,
including AAA rated private-label and FNMA, FHLMC residential mortgage backed securities. Auctions will be held on a weekly basis.
The Fed holds about $713 billion of Treasuries on its balance sheet.
The resource allows dealers to switch debt that is less liquid for U.S. government securities that are easily tradable.
The Nattering One muses... the banks are already technically insolvent and are hiding much larger losses due to ratings company duplicity in their scam.
Now the Fed, which already accepts credit card & boat loans at the window, is going to take on the recently toxic FNMA/FHLMC MBS debt.
The Fed truly is the world's largest pawn shop.
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