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I suppose you have a point and I will be the first to admit I have no
idea what goes on behind closed doors. This isn't exactly the
Chrylser bailout with gov't guarantees nor is it Third World debt.
On the other hand, the banks did cooperate nicely post-LTCM.
Still seems to me the easiest thing to do is to pump out the
mortgages and sell'em to the gov't agencies. Otherwise, they can
make credit card loans and securitize them as well. Stack'em, pack'em
and rack'em.
--- In realtraders@xxxx, Timothy Morge <tmorge@xxxx> wrote:
> Stuart:
>
> Actually, in situations like this, the Fed has a great tool--they
call the
> main players at major money center banks and tell them to loan
> aggressively. It isn't a tool they use often, but when they do
call, the
> major players listen, because the tool can work both ways. You may
need the
> Fed to help you on a short reserve day or with a major problem, so
it pays
> to listen, especially because all of your peers will be getting the
same
> call and the same cheap money.
>
> That doesn't mean the Fed will have an easy time of it. They know
they are
> pushing a wet noodle. It just means that they will use tactics they
> normally wouldn't take out of their tool box.
>
> Best,
>
> Tim Morge
> Blackthorne Capital
>
>
> At 11:14 PM 10/1/2001 -0400, you wrote:
> >Bruce
> >Does that mean money is tight now in the USA because comercial and
industrial
> >loans are crashing along with commercial paper.
> >Stuart
> >
> >bruce.larson@xxxx wrote:
> >
> > > The Fed injects liquidity by buying back mainly short
treasuries. So
> > > now the banks are sitting on alot of cash. The only way this is
> > > distributed through the system is if the banks are willing to
lend
> > > this excess cash out and if borrowers see leveraged investment
> > > possibilites. Japan loosened in the 90s but it didn't do the
> > > domestic economy any good because domestic borrowers were
perceived
> > > uncreditworthy. I'm sure the borrowers and investors were
already
> > > drowning in a tide of debt and stock market losses. Initally
the
> > > liquidity went offshore to Southeast Asian ventures which
pretty much
> > > all bit the dust. Now all the money is parked in long Japanese
> > > government bonds which last time I looked yielded about 1.4%.
Who in
> > > their right mind would buy long-term debt in the world's most
> > > indebted nation suffering through a severe recession and doing
> > > everything it can to weaken its own currency? Better off
putting
> > > your money under a mattress.
> > >
> > > --- In realtraders@xxxx, profitok <profitok@xxxx> wrote:
> > > > Hello
> > > > Attach is the latest m3 money supply as reported by the fed
> > > > ----- Original Message -----
> > > > From: "STUART AUSLANDER" <u.stuart-auslander@xxxx>
> > > > To: <realtraders@xxxx>
> > > > Sent: Monday, October 01, 2001 10:05 PM
> > > > Subject: [RT] Adjusted Reserves Sept 19, 2001
> > > >
> > > >
> > > > > Adjusted reserves of the banking system which have varied
from 60
> > > to 70
> > > > > billion for the last 3 years(except during Y2K) grew from
68 bil
> > > on
> > > > > September 5 to 107
> > > > > billion on September 19. (These are the Fed StLouis
measures of
> > > the
> > > > > required reserves need by the banking system to support
their
> > > > > deposits.) I would say the FED has taken out all the stops
and
> > > intends
> > > > > to dramatically stimulate the economy with money.
> > > > >
> > > > > It is my feeling (I would love feedback on this) that money
has
> > > been
> > > > > tight despite declining interest rates. Declining interest
rates
> > > do not
> > > > > necessarily make money loose. I suspect we have just seen
a major
> > > > > change in FED policy.
> > > > >
> > > > >
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> > > > >
> > > > >
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