question for toro and david

Discussion in 'Stock Market' started by wimpy77, Mar 4, 2009.

  1. wimpy77
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    wimpy77 Member

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    what do you guys think about this TALF thing?
     
  2. DavidS
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    DavidS Anti-Tea Party Member

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    I don't know enough about it to comment. I find the level of government intervention to be almost nauseating... but hell, I guess if we're going to go in, we should go ALL in.
     
  3. wimpy77
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    wimpy77 Member

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    i think the treasury and fed are going to try and fix this stuff at all cost and except the consequences later.
     
  4. Toro
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    Toro Diamond Member

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    I'm not sure, but I thought this was interesting.

    http://tonycrescenzi.rmblogs.thestreet.com/entry.aspx?q=b861ce96-9391-4c78-b558-9bc100aa8e95

    The TALF will provide stable funding for those wanting to purchase assets. That's important because lenders kept changing the terms of loans.
     
  5. DavidS
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    DavidS Anti-Tea Party Member

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    1 trillion dollars plus the hundreds of billions for fannie mae and freddie mac, plus bear sterns, plus aig, plus the bailout bill, plus the stimulus package, plus terp, plus the 9000 earmarks bill, plus a 4 trillion budget... are we at all running a risk for de-valuing our currency if we keep printing more and more and more money? I've lost count as to how much money we've spent in the past year. March 14th is the one-year anniversary of it all.
     
  6. wimpy77
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    wimpy77 Member

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    like i said in another thread they will do whatever it takes to get this thing rolling and worry about the consequences later
     
  7. DavidS
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    DavidS Anti-Tea Party Member

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    So what happens when we approach the bridge of consequences? We knew at least two years about this upcoming recession and what was causing it and we did nothing.

    We have a patient who is unable to breath on the table so we do a tracheotomy. But the tracheotomy causes an infection so we put the patient on antibiotics which causes other problems... are we delaying the inevitable here?

    What is the long-term, not short-term, the long-term solution to fixing this economy?
     
  8. Toro
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    Toro Diamond Member

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    Where's gonegolfin when you need him?!

    The TALF can best be thought of as a credit line, not as an increase in the monetary base. Essentially, the Fed is going to lend money at below market rates so that funds can buy assets and restart the securitization market.

    This could be huge. If the TALF is $1 trillion, and funds use 9:1 leverage, funds could buy up to $9 trillion in securities. When the program winds down, then the funds are withdrawn and the $1 trillion disappears off the Fed's balance sheet.
     
  9. wimpy77
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    wimpy77 Member

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    barnanke has said once this thing ends they will have to raise interest rates and more than likely taxes. this problem i believed could have done more to help last year but paulson waited for this administration to fix it. now we are behind the curve and people have criticized this administration for playing what amounts to catch up. but at this point they have had no choice.
     
  10. wimpy77
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    wimpy77 Member

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    yeah gonegolfin can explain this stuff better than most people.
     

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