The credit markets are effectively shut

[krazykarl]

What should be in the bill:

- 400-500 billion USD, all of which goes to the Fed.

-Fed reduces rates on Discount Window through which it loans out the 400-500 billion. Special discount window rate of 1.0% active for 24 months.

-Mortgages that are in MBS tranches get adjusted to Prime+1.0% for 24 months.

-Fed raises Prime by 0.5% immediately

-Fed regulators are given (Edit: temporary, proxied by congress) subpoena power and focus on tracing MBS tranches to lenders that committed fraud.




Not perfect, but a better solution then the current bailout bill.

 

[gnome]

Quote from m22au:

I think the US Govt (Fed and/or Treasury) would make further extreme intervention before the S&P fell below 750.

Some possibilities:

Cut Federal Funds Rate and Discount Rate to 0.25% or lower.

Cut taxes close to zero.

Use Government money to buy equities.

Don't forget.... Change USA name to "Zimbabwe Jr."

 

[Mecro]

Quote from krazykarl:

What should be in the bill:

- 400-500 billion USD, all of which goes to the Fed.

-Fed reduces rates on Discount Window through which it loans out the 400-500 billion. Special discount window rate of 1.0% active for 24 months.

-Mortgages that are in MBS tranches get adjusted to Prime+1.0% for 24 months.

-Fed raises Prime by 0.5% immediately

-Fed regulators are given (Edit: temporary, proxied by congress) subpoena power and focus on tracing MBS tranches to lenders that committed fraud.




Not perfect, but a better solution then the current bailout bill.

Well now I see why you picked "krazykarl" as your name.

 

[krazykarl]

Quote from Mecro:

Well now I see why you picked "krazykarl" as your name.

It is crazy, but it makes the holders of those tranches live with them, instead of pawning them off on the govt.

It's crazy only in its elegance, which is why it would never be brought up for a vote.

 

[aresky]

Quote from mokwit:

............ They [ and GS] are not and never were working capital lenders to mid size businesses. Any lending was a sweetener to get the underwriting business. ....

for instance Altria received $7 billion in financing from Goldman Sachs & Co. and JPMorgan Chase & Co. (UST purchase)