Fed Revs Up Lending in Latest Jolt to Credit Market

[LadyMod at scam.com]

Check this out Moby.


http://www.bloomberg.com/apps/news?pid=20601068&sid=aTNWHKv5CoPw&refer=home

May 2 (Bloomberg) -- The Federal Reserve, seeking to prevent a deeper economic slowdown, took another stab at coaxing banks into lending at lower rates.

The Fed boosted its biweekly Term Auction Facility sales of cash to banks by 50 percent to $75 billion and expanded the collateral it takes from bond dealers through loans of Treasury securities. It also raised the amount of dollars it makes available to the European Central Bank and Swiss National Bank through swap lines to a combined $62 billion from $36 billion.

Borrowing costs for banks have risen as much as 0.38 percentage point in the past six weeks, an increase that blunted the impact of the cash injections that began in December. The strains threatened to further impair mortgage markets, worsening an economy where growth has already stalled.

``The world is awash in liquidity, it just isn't reaching the right financial borrowers,'' said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. ``Today's action from the central banks is another strong dose of medicine that will help cure what ails the credit markets.''

Fed officials also expanded the collateral they accept under the Term Securities Lending Facility to include AAA rated asset- backed investments. About 95 percent of outstanding student-loan securities are AAA, according to the American Securitization Forum. Democrats in Congress had pushed Chairman Ben S. Bernanke to take student-loan bonds on the central bank's balance sheet.


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[Moby]

So the feds are going to pump more money into economy.

However, I think that one of the big economic issues we're faces is too much money being pumped into the economy and foreign banks buying the bonds that back those dollars.

I've never read anything that claims China and Saudi Arabia buying our bonds is a good thing however, the media will never print much about it because most Americans don't understand how our monetary system works.

I think selling more money will only make the dollar worse and make the long term economic situation worse.

[LadyMod at scam.com]

So the feds are going to pump more money into economy.

However, I think that one of the big economic issues we're faces is too much money being pumped into the economy and foreign banks buying the bonds that back those dollars.

I've never read anything that claims China and Saudi Arabia buying our bonds is a good thing however, the media will never print much about it because most Americans don't understand how our monetary system works.

I think selling more money will only make the dollar worse and make the long term economic situation worse.

I agree. I heard on Paul Harvey (the guest commentator that takes over periodically) that one of the T Bills came due this week.

I wonder if that might have something to do with it?

This administration is selling us down the river without a paddle boat to our name. When we won the Revolution, England wasn't that upset. They said they would break us from within. Daddy Bush was knighted awhile back.
http://uts.cc.utexas.edu/~wbova/fn/history/bush.htm

The things one remembers at 6:00 AM. LOL.


Lady Mod

[Cat slave]

So the feds are going to pump more money into economy.

However, I think that one of the big economic issues we're faces is too much money being pumped into the economy and foreign banks buying the bonds that back those dollars.

I've never read anything that claims China and Saudi Arabia buying our bonds is a good thing however, the media will never print much about it because most Americans don't understand how our monetary system works.

I think selling more money will only make the dollar worse and make the long term economic situation worse.


Isnt that what started the sub prime lending mess? Making sure consumers
got loans whether they could really afford them or not? I think credit card
companies are right in whacking non payers with higher interest rates and
fees. First rule in borrowing....be responsible and pay on time if not in full.

[Moby]

Isnt that what started the sub prime lending mess? Making sure consumers
got loans whether they could really afford them or not? I think credit card
companies are right in whacking non payers with higher interest rates and
fees. First rule in borrowing....be responsible and pay on time if not in full.
This isn't credit card loans.

When the US government wants more money they go the banks that make up the federal Reserve "Feds". The Feds then have money printed up but it has no value until there's something to support it. They sell bonds to support the value of the new dollars. These are really just "I Owe Yous" and interest has to be paid. So basically, every time a new dollar enters circulation without pulling an old dollar then the US has to borrow money.

With Reagan's economic plan of borrowing huge amounts of money most of the bonds were bought up by Americans. I forget the exact numbers but I think it was around 80%. With Bush's economic plan of borrowing obscene amounts of money only about 1/2 of the bonds end up in American hands.

Because of our trade policies, we're borrowing money and it's getting invested in China and being dumped in The Middle East. Since the money isn't staying here and we're borrowing way beyond our means people aren't willing to pay squat for the US Dollar.

The Neoconservative media doesn't tell you these things and the programmed sheep aren't smart enough to check things our for themselves so they have NO CLUE.

Lowering the value of currency can provide a short term boost in the economy. The size of the boost depends on how the economy is structured. Basically exporting becomes cheaper and importing becomes more expensive. Usually you see the exports increase before the imports decrease.

That's what the administration has been doing. Let's get a short term fix until the election. Fuck the long term because we'll just blame the next guy.

Basically the administration has decided to keep borrowing with no plans of ever paying it back. By the time we have to start making those payments these guys will have moved on and it won't be their problem.

You'll never get any of the hater dogs to comment on this stuff because the programming doesn't allow this since it shows that Bush is a terrible President.

[Cat slave]

I was with you until that last sentence. It was good information until the "dig"!

[LadyMod at scam.com]

I was with you until that last sentence. It was good information until the "dig"!


It was better after.


;)

[Moby]

I was with you until that last sentence. It was good information until the "dig"!
It was a dig but now most Americans agree that Bush isn't doing a good job and if they ever understand what "Deficit" really means then they'll think the same way I do.

It was a hard dig. The truth is that you won't hear this on Glen, Rush of Fox because it does make the administration and the congress of 2000 - 2004 look less then good.

[Cat slave]

I was very interested in your post until the "dig"...guess I shouldnt throw the
baby out with the water so to speak and just ignore the last part.:D

[disrupter]

" . . . it just isn't reaching the right financial borrowers,'' said Chris Rupkey
me thinks people holding currency have made a re-examination & found these 'right' people wanting, unworthy.

Luckily the Fed is there to try to be their fool instead.
Doesn't that give you a lot of confidence in the American system of governance?

<raises little tiny hand & with little tiny voice> 'not me'