Comments on: U.S. Fed Now Accepts Credit Card Debt as Collateral

By: Hmmmm....

Hmmmm.... — Fri, 09 May 2008 13:06:42 +0000

Also, if the problem is poor asset quality, why then are the student loan ARS being shunned so? They're 97-98% guaranteed as to principal AND interest by the Department of Education.

Go figure.

By: Hmmmm....

Hmmmm.... — Fri, 09 May 2008 13:05:00 +0000

I'm wondering what good a 28 day loan does for the Auction Rate investors. Banks can't literally "swap" ARS for Treasuries, that's FALSE. They can pledge them as collateral, but the Fed never owns the ARS. Further, the Fed isn't loaning 1:1 for the ARS, more like 80-90 cents on the dollar. The term "swap" which has shown up in several articles is overly optimistic and just flat out wrong. A 28 day loan doesn't help investors stuck with 30 year bonds.

By: JD

JD — Thu, 08 May 2008 00:17:49 +0000

This is merely another method of nationalizing the debt. Soon, the US Govt. will literally own their citizens.

By: Joe

Joe — Wed, 07 May 2008 22:24:47 +0000

NYU Economist Nouriel Roubini predicted this move back on March 4/08 as part of an article for Finance Week entitled “The Rising Risk of a Systemic Financial Meltdown: Twelve Steps to Financial Disaster” http://tinyurl.com/2uhx24

So far, Roubini's predictions are gaining in unerring credibility each day, as though he had a crystal ball the actual events parallel his predictions so closely. His work warrants paying close attention.

By: ex-sunnyvale-renter

ex-sunnyvale-renter — Wed, 07 May 2008 16:04:43 +0000

Doesn't this mean that the poor wage-slave who's lost their job, and can't pay their CC debt, will now have the Feds after them?

Suddenly CC debt, dischargeable through bankruptcy or the statute of limitations, will now become Federal debt, not dischargeable at all, but following the wage-slave for life, like US student loans?

If this does not get my fellow US subjects rioting in the streets I guess nothing will.

Australia you are far away, but some of us know now to sail. Prepare for refugees.

By: mike

mike — Mon, 05 May 2008 13:50:47 +0000

..and now...from wikipedia.."In his first book Theodore Geisel features the character the Cat in(The Cat in the Hat, 1957), the Cat brings a cheerful, exotic and exuberant form of chaos to a household of two young children one rainy day while their mother is out. Bringing with him two creatures appropriately named Thing One and Thing Two, the Cat performs all sorts of wacky tricks to amuse the children, with mixed results. The Cat's antics are vainly opposed by the family pet, who is a sentient and articulate goldfish. The children (Sally and her older brother, who serves as the narrator) ultimately prove exemplary latchkey children, capturing the Things and bringing the Cat under control. He cleans up the house on his way out, disappearing seconds before the mother arrives."

By: justin

justin — Mon, 05 May 2008 07:01:47 +0000

Is it perhaps possible that rather than banks not lending to each other because they don't know with whom the bad debt lies, that banks can't lend to each other because their 'assets' were nothing but 'credit' to begin with and so they have nothing to lend? I have read that the word credit is derived from the latin word credere, meaning 'to believe'. Thus if people don't believe that credit is an asset, then it is worth nothing. Furthermore, how will the reserve bank offering more 'credit' help the situation?