Fed Expands TALF to include more Securities
Submitted by
CalculatedRisk on Thu, 03/19/2009 - 1:37pm (73 comments)
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I wonder if I can use my '97 Civic as collateral.
emo!
The Latest from Denninger:
FLASH: Geithner ADMITS To Exception Demand
So when does he get Fired?
I once read the Fed's charter and think that it mentioned direct loaning to the people. It's about time. Let's cut-out the middlemen.
Why don't they set up a stall in every city with a slogan: "We overpay for crap". I am sure there will be a line.
Getting tired of JS-Kit eating comments...
I keep seeing the phrase "avoidable foreclosures", but I have no idea what it is supposed to mean, exactly. Anybody know?
I wonder if I can use my '97 Civic as collateral.
Absolutely. And the best part is that the fed will pay more than any other buyer. It's part of the new win-win (e)CONomy. You can't lose. Bring on the LEVERAGE!
"Security."
I do not think that word means what it used to mean.
Habitat for Humanity getting into teardowns!
kitchen sink?
"Row Dawg writes: I do not think that word [Security] means what it used to mean. "
Add the word, "Freedom" to that list also.
Why bother with the rating of the ABS? Everyone knows the rating is garbage.
So.. The Fed will buy existing crap ABS from whoever is holding it now. They will take that money and do exactly what with it? Buy treasuries? Where can anyone get a decent return these days? Some kind of retarded tax incentivized renewable energy projects? We are building an inefficiency bubble with tax credits. Its wonderful.
is there any chance of going back to the old comments systems?
posted this in previous thread...
interesting read...
Business Week Online > File Not Found
Lau said the government's numbers don't reflect the severity of the situation because many factories have closed but they're still in the middle of the arduous process of shutting down a plant. He reckons that about 2,000 to 3,000 factories began the process in the third and fourth quarters of last year.
When I was a kid growing up, a local mattress and bedding store was run by a guy that ran commercials as "bargain Bernie". He pretended to be crazy, saying he would sell mattresses at 'insane' prices.
Every time I hear a new announcement from the Fed, I think of "Bargain Bernie" and his "crazy deals".
Don't know why, just do.
Does Todays Market Slide Signal the Next Leg Down?
Automonkey --
The Fed will buy existing crap ABS from whoever is holding it now. They will take that money and do exactly what with it?
Make more similar loans. With FedLeverage™, even a tiny spread multiplies into big hedge fund profits. And the best part is, the money comes from nowhere. All winners, no losers!
I sure could use some Talf for my tender buns (oh, wait, maybe I mean talc).
Why bother requiring that the 'assets' be bundled into Asset Backed Securities. A Federal Reserve branch bank in the city would be fine with me to use as a replacement for Bank (Robber) of America.
As long as they use/allow electronic banking, that is. Branch physical facilities are a waste of depositors potential interest returns. One branch per major city would be fine for when you want to take in your empty briefcase or backpack and take all your 'money' in Benjamins.
Here's someone to complain to re comments:
"JS-Kit, a startup that develops a series of widgets that can be quickly integrated into websites, has raised $3.6 million in a Series B funding round led by Altos Ventures, with existing investor TEF3 also participating. The company says that it will use the funding to expand its team of engineers, along with the addition of DataPortability’s Chris Saad as Strategic Advisor."
A few expressive calls or emails to the VC's office might be satisfying, at least.
Banksters replace TARP with TALF so that they can keep their bonuses.
implosion - Definition from the Merriam-Webster Online Dictionary
implosion
Yeah, I gotta few IOUs from customers of my loanshark... er...lending business, and Benny the Beard is taking them off my hands at primo values.
fed should have insisted that lenders using credit card ABS agree to the credit card reforms due next year. bankers and institutional investors win. little guys lose.
Here is an interesting list of next generation collateral from bernanke, which focuses on Tax Payers speculating on futures:
List of trading losses - Wikipedia, the free encyclopedia
JimPortlandOR --
Why bother requiring that the 'assets' be bundled into Asset Backed Securities. A Federal Reserve branch bank in the city would be fine with me to use as a replacement for Bank (Robber) of America.
Not sure if your question is rhetorical...
The Fed is not making loans directly to businesses or consumers. They apply a haircut (search for "collateral haircuts" in the FAQ
) to the ABS in order to reduce the credit risk assumed by the central bank.
Incidentally, I agree with you about BofA. Bank of America is a criminal enterprise.
Can anyone explain to me what a "floorplan loan" is?
WTF!
.................
And if the securities cease to be AAA?
that wont happy on timmay's watch...
the problem with debt is its just so damn hard to get rid of... :-E
DitchTheDollar says:
Today, 04:18:20 PM
“From Reuters
<dl>MOSCOW -- China and other emerging nations back Russia's call for a discussion on how to replace the dollar as the world's primary reserve currency, a senior Russian government source said on Thursday.</dl>
As does the UN.
U.N. panel says world should ditch dollar
LUXEMBOURG (Reuters) - A U.N. panel will next week recommend that the world ditch the dollar as its reserve currency in favor of a shared basket of currencies, a member of the panel said on Wednesday, adding to pressure on the dollar.
Currency specialist Avinash Persaud, a member of the panel of experts, told a Reuters Funds Summit in Luxembourg that the proposal was to create something like the old Ecu, or European currency unit, that was a hard-traded, weighted basket.
AIG Employees Feel The Wrath
But, we mustn't forget that the bonuses are just a drop in the bailout bucket, which may have a gaping hole in its bottom.
there is way too much money being paid to manage institutional funds (and what you usually get is a "manager" investing exclusively with another manager). sigh
Two top advisers to Alan G. Hevesi, the former state comptroller, were charged on Thursday in a 123-count indictment that said they had turned New York’s $120 billion pension fund into a criminal enterprise that netted them and other Hevesi associates tens of millions of dollars in kickbacks from firms investing the fund’s money.
2 Are Accused Of Vast Fraud Over Pensions - NY Times
"Habitat for Humanity getting into teardowns!"
It's money for them in two ways, win-win. First, they're getting a subsidy to do it. Second, some chapter maintain salvage yards of usable building material/fittings that they can either reuse in projects or donate to other nonprofits who are trying to build/rehab low income housing.
Finally, they're most likely improving a low-income neighborhood and making it more liveable, and that's well within the bounds of their mission.
Like I said in another post, down my way, our (small) chapter of HFH is looking to buy a cheap REO to rehab, maybe build a granny unit on the same lot and make it a duplex.
Can I swap out the fillings in my teeth? How about some of my boy's used toys?
This is AWESOME !
short answer: "floorplan loan" is a loan to auto dealers to finance their car inventory
thanks. (i'm in construction and thought it was based on 'floor plans' or drawnigs or something.... blood pressure is returning to normal...)
cd,
That BW piece on China was very good. It's no surprise that orders aren't materializing, but the turnaround in Chinese companies' need to actually try to sell rather than just take orders emphasized the change. I think that chances of unrest will be high this summer when it will be obvious to all in China that American demand didn't come back and 2009 will be a complete disaster. It will be quite a turnaround from the triumphalist Olympic mood.
ades --
Yeah that was a new one on me, too. Here is what I found.
from Nemos link "However, when the liquidity crisis hit, the floorplan securitization market froze up just like a lot of other credit markets. Institutional investors stopped buying floorplan securitizations or offered to buy them only at prices at which the floorplan lenders could not afford to sell."
I love it how people still refer to this "freezing of the credit markets" like its something that is completely unrelated to the fact that there are tooo many damn cars out there....
People need to realize its not a financial flu, the good producing economy is sick. "Fixing the credit markets" wont help bring rates down to levels that dont reflect the risk associated with bad business decisions...
........................
That dude said it well:
"Treasury Secretary Timothy Geithner said Thursday that he takes responsibility for knowing the stimulus legislation had a loophole that would allow bailed-out insurance giant American International Group to keep its bonuses.
In an interview with CNN's Ali Velshi, Geithner said the Treasury Department did talk to Sen. Chris Dodd about a clause he put forth that would have strictly limited executive bonuses.
So Dodd was telling the truth - he was pressured by Treasury, and apparently, Geithner didn't bother to tell his boss (the President, of course) about it up front.
Tim, there are mistakes and then there are really big mistakes. The latter demand resignations.
This is one of them.
Time to resign Tim; cheating on your taxes is bad enough, but funneling over $100 billion of taxpayer money to your banking friends, and over $160 million to the employees who blew up the financial world, is a bridge too far."
I said in November that Geithner would ruin Obama's presidency. This was on another blog. I stated that the mere nomination was destroying Obama's credibility. None of the Obama supporters agreed. Not a single one would question Obama. It was like I was in the middle of the Jonestown crowd. They couldn't even consider questioning their Leader.
One of the most vocal idiots on this other blog wrote, just two days ago, "I love Obama". He was serious. The Obama supporters are just as scary as the Bush supporters. They are two peas from the same pod. Obama's presidency is dying in the crib and Geithner is standing over the infant holding a meat cleaver.
there is way too much money being paid to manage institutional funds (and what you usually get is a "manager" investing exclusively with another manager). sigh
Next one on the list: CalPERS.
Fed to buy 1 Trillion in debt
I'm still a little confused about how they are buying all this debt? More debt right? Sounds a little like BSC to me....
The Citi stockholder never sleep.s
"can someone explain what a floorplan loan is?"
I sell apples on a cart, downtown. A floorplan loan is gov't money
that lets me pay for my apple inventory, so I have something to sell, even though no one wants apples.
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Interesting Times says:
Today, 5:10:01 PM
Can I swap out the fillings in my teeth? How about some of my boy's used toys?
Only the rich and the politically well-connected get as much of the monopoly money. All the little people have to work for it like it was real.
An avoidable foreclosure would be one where the borrower was current, and saw that all the houses around him were being sold at half the amount of the mortgage he owed, and getting somewhat seedy in the neighborhood, and the lender couldn't get more than half anyway, and they sensibly realized this and bargained with the owner to not only lower the rate, but cram down the balance to say, 60% of the amount owed, which would leave the owner still underwater, but with hope that sometime before the Apocalypse he would break even, and be grateful because now his mtg payment would be really affordable.
From the OCC:
Floor plan, or wholesale, lending is a form of retail goods inventory financing
in which each loan advance is made against a specific piece of collateral. As
each piece of collateral is sold by the dealer, the loan advance against that
piece of collateral is repaid. Items commonly subject to floor plan debt are
automobiles, large home appliances, furniture, television and stereo equipment,
boats, mobile homes, and other types of merchandise usually sold under a sales
finance contract.
"floorplan loan"?
It's a method of financing dealer inventory. It's not the dealer's inventory (e.g., Ford of BFE, or Circuit City of Flatrock). Instead, it is the manufacturer's inventory, or the finance company's inventory. The dealer is charged to have it on the lot, or on the showroom "floor".
"thanks. (i'm in construction and thought it was based on 'floor plans' or drawnigs or something.... blood pressure is returning to normal...)"
Dont worry nades, that's not for atleast another couple of months :-E
poic - i posted this yesterday but its worth repeating.
i'm now bidding on a mini-mart. yep! we've gone from 800MM hospitals to mini-marts in a little less than a year.
lots of girm faces here. and still way to much optimism...
New Thread: Banks Sell Some REOs in Bulk below Market Prices
http://www.calculatedriskblog.com/2009/03/banks-sell-some-reos-in-bulk-below.html ( 0 comments ...You could be FIRST! )
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This gem been posted yet?
Goldman to detail AIG trading relationship Friday
By Greg Morcroft, MarketWatch
Last update: 4:29 p.m. EDT March 19, 2009Comments: 2NEW YORK (MarketWatch) -- Goldman Sachs said it would hold a conference call with reporters on Friday to, "answer questions from journalists, and clarify certain misperceptions in the press regarding Goldman Sachs' trading relationship with American International Group."
Members of the public can listen to the call via webcast, the company said in a press release.
http://www.marketwatch.com/news/story/goldman-detail-aig-trading-relationship/story.aspx?guid=%7B83E134BA%2DA983%2D451F%2DB6A7%2DFF4D005EEECF%7D&siteid=yhoof
A floorplan loan can be any inventory--usually large sized big ticket items. In its classic form the washing machines or whatever are located in a sales area, and can't be moved off the premises without the lender knowing about it and getting a pay-off on the item. I'm sure there are lots of versions of this. The idea is inventory goes in and out and the lender stays protected on the loan for whatever's there.
expanding diagonal triangle, lookout below s&p 620
A U.N. panel will next week recommend that the world ditch the dollar as its reserve currency in favor of a shared basket of currencies.
The Hour of Yogi is at hand!
Soon we'll all be speaking Cosmoranto and Africa will be a peaceful and blossoming Eden. Oh yeah, and the Israeli occupation of Palestine will end. They deplore that. And some other things too.
The reason people are leaving the dollar is that you would be an idiot not to. The idea of a basket currency of reserve and account is not exactly new -- does anyone out there still have any Ecu, maybe some they bought out of curiosity or good humor, and never negotiated their way out of?
Reserve currencies are a facet of hegemony and are about the facts as they stand in the autarky of the cultural ecumene. When a new order emerges, a new trade regime will emerge with it. I don't think we will see a smooth transition this time as between the GBP and the USD.
...Fed Expands TALF to include more Securities...
I guess these idiots will now take my boat-loan too ?
Hihi, America !
Kung Fu Panda-
cd,
That BW piece on China was very good. It's no surprise that orders aren't materializing, but the turnaround in Chinese companies' need to actually try to sell rather than just take orders emphasized the change. I think that chances of unrest will be high this summer when it will be obvious to all in China that American demand didn't come back and 2009 will be a complete disaster. It will be quite a turnaround from the triumphalist Olympic mood.
that was my take too..and now they might be taken advantage of via letters of credit etc...fictitious company in america orders 2 containers of furniture on credit and go bankrupt with the 300K of furniture in possession then sell at auction for 150K....easy money....
"Mortgage servicing advances are loans extended by residential mortgage servicers to cover payments missed by homeowners."
...so now the servicer barrows money (plus interest) to cover the growing gap in missed payments. The RMBS/bank no longer needs to; re-work, cram-down, foresclose, mark down the asset to a realistic market price or, try to sell it. The servicer just continues to barrow from the Fed to cover more missed payments on an over priced asset and the cycle continues...
With this system, a loan is kept "current" no matter how bad the situation! Heads they win. Tails they win.
...if the servicer has a set amount in reserve for some missed payments, fine. Why keep piling more debt on top of more debt to solve the underlying problem of too much debt?!?!
This floor the gov't is trying to put under housing prices and auto sales is the second level on a house of cards.
Werner says:
Today, 5:35:09 PM
I guess these idiots will now take my boat-loan too ?
They will take your dead parakeet as if it was alive, and at a market value as a prize parakeet that you assert. They used to insist on a good pedigree for their dead parakeets but now they will take any old bird.
FoamFinger1 says:
Today, 5:41:19 PM
...so now the servicer barrows money (plus interest) to cover the growing gap in missed payments. The RMBS/bank no longer needs to; re-work, cram-down, foresclose, mark down the asset to a realistic market price or, try to sell it. The servicer just continues to barrow from the Fed to cover more missed payments on an over priced asset and the cycle continues...
See how much more efficient tarponomics is than conventional economics? Soon tarponomics will supplant much of the so called "real" economy, at least for a little while!
Cash for trash.
If the fraud rate for 2008 home loans is showing up worse than bubble years, can you see how the current "Fix" will only grease the wheels for more BS real estate deals.
The Fed buying any and all ABS, RMBS, *BS will just keep the crooks in business.
What did the inside traders learn yesterday?
CHICAGO (Reuters) - Option volume in Citigroup (C.N) on Wednesday skyrocketed, as the bank's calls became more popular than the S&P 500 SPDR SPY.P exchange-traded fund, typically a top favorite among the options crowd.
About 1.82 million calls, which give buying rights to Citigroup shares, traded, more than seven times the norm as investors who had bet the stock would fall were forced to reverse that trade when the shares soared nearly 23 percent....
How did they find out yesterday?
NEW YORK (Reuters) - Trading in shares of Citigroup Inc (C.N) was halted on Thursday pending news on the company, according to the Nasdaq Trader website.
another ignore test
this is a test of the blahg comment system
another another ignore test
LAST TEST I HOPE
I expect in 36 hours the assets accepted will be expanded to include comic books, baseball cards, beanie babys, cabbage patch kids, 8-track tape players, and those little Japanese tiddy wink like thingys. Additionally, they will be "no-doc."
The Fed is the largest auto dealer and business equipment dealer in the country!
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