siegfried

The Real Threat of the Housing Bubble

here's an idea for ben: let investment bankers trade their asset backed securities at the fed window for treasuries--then they can issue more of the same and sell them directly to the fed. this liquidity will permit existing homeowners to borrow more against their houses, and then the investment banks can securitize these loans and sell them to the fed for treasury bills. of course the fed should only do this for securities that are rated investment grade by moody's and s&p. this process will cure everything.

'Fedization': Bear's Rescue Presents a Major Moral Hazard

giving investment bankers access to the Fed window is like giving a crackhead access to a cocaine mine.