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TALF: Quicker, easier, more seductive
Accrued Interest — The Fed has expanded the Term Asset-Backed Loan Facility (TALF), which AI first discussed here. Here is the quick recap of the facility. 1) Fed will loan funds for purchase of recently issued ABS. This was clarified to mean ABS issued after January 1, 2009 made up of loans no older than October 2007. The ABS must be rated AAA, and be made up of student loans, auto loans, small business loans, or credit cards. 2) Loans will be non-recourse and not marked-to-market. The borrower will not have to deal with margin calls ...

Fedthink
interfluidity — ... won the small subsidy it has long lobbied for, but the size of that subsidy has grown by almost 8000%. The Fed is no longer lending only to financial institutions that would have to go under before taxpayers eat their losses. Under TALF, the Fed will lend to anyone who owns the kind of securities whose prices the Fed wants support. The borrowers will take the upside, while taxpayers eat the downside. (Does anybody know what kind of leverage the Fed will support under TALF? I've looked , but haven't found.) The non-recourse lending that was extraordinary and barely legal when ...