Tilted Forum Project Discussion Community - View Single Post - Translation: The "Fed" Itself Is Close To Insolvency

host · 04-10-2008, 08:00 AM

hey ace! Did you happen to click on the link to the Bloomberg article on CLO's?

(By the way....what do you think of that black judge, in the video on the other thread? Isn't that something, what he said to the non-blacks, in his courtroom?)

The link is in the first paragraph of the OP. Remember, before last month, the Fed didn't accept crap like MBS and CLOs from brokerages....or anything at all from them...since it hadn't made loans to them since the 1930s.

Consider also, that before last August, the "principle dealers", the banks that sold T-Bills and had borrowing privileges at the Fed discount window, could not lend more than 10 percent of their total reserves, to their brokerage subsidiaries.
The Fed raised that limit, last summer, to 30 percent, for four of the largest US banks.

You do see the progression here, ace? The Fed, before last month, only accepted collateral from primary dealer banks, against loans. The minimum collateral accepted were of the highest quality...... even from banks.

Banks, if they are FDIC members, and they have to be if they insure deposits up to $100,000 per account, are limited to lending 7 times their total assets.
Bear Stearns was leveraged 30 times it's total assets. The Fed is lending to brokerages without regulating them or capping their leverage. which is 4 times the bank leverage cap of 7X....

The taxpayer via, the Fed, is now at risk because the Fed is holding the near worthless paper of the brokerages, and it is lending away it's own assets, which are taxpayer assets....why do you think this OP article is in the WSJ?

It is a trail balloon to test if anything the Fed does will illicit public comment and REAL objection.

04-10-2008, 08:00 AM	#3 (permalink)
host Banned	hey ace! Did you happen to click on the link to the Bloomberg article on CLO's? (By the way....what do you think of that black judge, in the video on the other thread? Isn't that something, what he said to the non-blacks, in his courtroom?) The link is in the first paragraph of the OP. Remember, before last month, the Fed didn't accept crap like MBS and CLOs from brokerages....or anything at all from them...since it hadn't made loans to them since the 1930s. Consider also, that before last August, the "principle dealers", the banks that sold T-Bills and had borrowing privileges at the Fed discount window, could not lend more than 10 percent of their total reserves, to their brokerage subsidiaries. The Fed raised that limit, last summer, to 30 percent, for four of the largest US banks. You do see the progression here, ace? The Fed, before last month, only accepted collateral from primary dealer banks, against loans. The minimum collateral accepted were of the highest quality...... even from banks. Banks, if they are FDIC members, and they have to be if they insure deposits up to $100,000 per account, are limited to lending 7 times their total assets. Bear Stearns was leveraged 30 times it's total assets. The Fed is lending to brokerages without regulating them or capping their leverage. which is 4 times the bank leverage cap of 7X.... The taxpayer via, the Fed, is now at risk because the Fed is holding the near worthless paper of the brokerages, and it is lending away it's own assets, which are taxpayer assets....why do you think this OP article is in the WSJ? It is a trail balloon to test if anything the Fed does will illicit public comment and REAL objection.