Wait a minute... did the fed say its going to extend credit to households?

[tradersboredom]

bankers job as a profession is to lend money based on qualifications of borrower. banks were lending money wholesale and loans were insured, now the insurance company for the loans went under, the banks are holding the bag

it's call moral hazard. banks were making risky loans that they thought were insured.

that is why AIG went under.

Quote from gnome:

"Free money loans to every dickweed who asks" got us into this mess. How is the Fed "lending to everybody" going to fix anything??

 

[gnome]

Quote from tradersboredom:

bankers job as a profession is to lend money based on qualifications of borrower. banks were lending money wholesale and loans were insured, now the insurance company for the loans went under, the banks are holding the bag

it's call moral hazard. banks were making risky loans that they thought were insured.

that is why AIG went under.

Why were they "insured"? Because Gummint intervened and TOLD FNM and monolines to rate such risks as AAA... All BULLSHIT... ALL GUMMINT BULLSHIT.... which is what usually happens when you hang a label of "golden" on "crapola"...

Had the DemoCraps, in 1999, not demanded Affirmative Action Loans for non-qualified mortgagees, NONE of this mess would likely have ever happened. Swoon over NObama all you want, but the DemoCraps are RESPONSIBLE for starting this mess... and now they controll ALL of Gummint... Heaven help us!

 

[scriabinop23]

Quote from tradersboredom:

it's absurd that people are still paying 20% interest on retail and credit cards when the banks are paying only 3% on money or less than 10%

100% profit on credit card business asssuming no personal bankruptcies.

absolutely not absurd. Default risk is high and they need to get paid to offset that risk. And that debt is unsecured.

But it also tells something else: banks are a buy, as they are *properly* pricing risk and will offset their lending losses with usurious interest rates effectly.

Subprime mortgages should have gone for 15% interest. If that was the case in 2005+, we'd all be better off today.

 

[Anaconda]

Quote from gnome:

Why were they "insured"? Because Gummint intervened and TOLD FNM and monolines to rate such risks as AAA... All BULLSHIT... ALL GUMMINT BULLSHIT.... which is what usually happens when you hang a label of "golden" on "crapola"...

Had the DemoCraps, in 1999, not demanded Affirmative Action Loans for non-qualified mortgagees, NONE of this mess would likely have ever happened. Swoon over NObama all you want, but the DemoCraps are RESPONSIBLE for starting this mess... and now they controll ALL of Gummint... Heaven help us!

Uhm, you're very confused. Neither Demos or Reps had anything to do with it. Only real legislation that contributed was de-regulation allowing retail & investment banks to be one entity.

More importantly, it was the Federal Reserve recognizing CDS & similiar derivatives (CMS, CDOs, MBSes, etc.) as financial products, hence "assets" that are put on the books of the banks. Late 1990s into 2000 is when this happened.

 

[Anaconda]

Quote from Bob111:

i'm ready to borrow @ 1-2%

Hell fucking yeah. Count me in.

I'm ready to borrow boatloads. I'm not ready to repay it though, but why should that be an issue. It was not for the big boys.

 

[Lucrum]

Quote from gnome:

"Free money loans to every dickweed who asks" got us into this mess. How is the Fed "lending to everybody" going to fix anything??

It's not, only going to make it worse.

 

[fearless9]

Quote from gnome:

"Free money loans to every dickweed who asks" got us into this mess. How is the Fed "lending to everybody" going to fix anything??

You do realise that the people who are making the noise are not the ones staying on to clean up this mess.

regards
f9

 

[robbie380]

Quote from bond tr4der:

Early next year, the Federal Reserve will also implement the Term Asset-Backed Securities Loan Facility to facilitate the extension of credit to households and small businesses.

http://www.federalreserve.gov/newsevents/press/monetary/20081216b.htm

So the fed is going retail? no way!

i think this is trying to get the banks to lend out the money not the fed itself to households. i don't like it but just clarifying.