Hedge funds gain access to $200bn Fed aid

[Robbien]

Source: International Herald Tribune

Hedge funds will be allowed to borrow from the Federal Reserve for the first time under a landmark $200bn programme intended to support consumer credit.

The Fed said on Friday it would offer low-cost three-year funding to any US company investing in securitised consumer loans under the Term Asset-backed Securities Loan Facility (TALF). This includes hedge funds, which have never been able to borrow from the US central bank before, although the Fed may not permit hedge funds to use offshore vehicles to conduct the transactions.

Read more: http://www.ft.com/cms/s/989db158-ce30-11dd-8b30-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F989db158-ce30-11dd-8b30-000077b07658.html%3Fnclick_check%3D1&_i_referer=http%3A%2F%2Fwww.freerepublic.com%2Ftag%2Fn

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The biggest crooks at the root of the bubble now being allowed to feed at the trough.

Then adding insult to injury, hedges "may not" be allowed access to public funds through their offshore tax exempt accounts. Not will not be allowed, but may not be allowed. Sounds as if hedges will definitely be using their offshore tax exempt accounts.

[Donnachaidh]

1. oh HELL no! n/t

[seafan]

2. The biggest heist in American history rolls on.

Hedge funds gain access to $200bn Fed aid

By Krishna Guha in Washington
December 20, 2008

Hedge funds will be allowed to borrow from the Federal Reserve for the first time under a landmark $200bn programme intended to support consumer credit.
The Fed said on Friday it would offer low-cost three-year funding to any US company investing in securitised consumer loans under the Term Asset-backed Securities Loan Facility (TALF). This includes hedge funds, which have never been able to borrow from the US central bank before, although the Fed may not permit hedge funds to use offshore vehicles to conduct the transactions.

.....

The asset-backed securities to be funded under the programme are pools of credit card receivables, automobile loans and student loans.

.....

Making the scheme open to all US companies is a radical departure for the Fed, which normally supports financial market liquidity indirectly by ensuring banks have adequate liquidity to make loans to other investors.
However, the liquidity the Fed is providing to banks is not flowing through to financial markets, because banks are balance-sheet constrained and risk-averse. So it is channelling funds directly to investors.

.....

The scheme is not designed specifically for hedge funds and a wide range of financial institutions are likely to participate.
Nonetheless, Fed officials hope that hedge funds will be among those investors that take advantage of the low-cost finance to drive down spreads.
The loans will be secured only against the securities and not the borrower. However, the Fed will lend slightly less than the value of the securities pledged as collateral. The Treasury has committed $20bn to cover potential losses.

.....

This. Is. Just. So. Screwed. Up.


And no one is being held accountable. For any of it. For the past eight years, going on 29.


Thanks, Congress. You miserable collection of sniveling, complicit jellyfish.

[Gin]

3. Santa Bush gives his last gift to his base.....or maybe it isn't his last gift

time will tell.

[Celebration]

9. this is the REALLY bad part

The loans will be secured only against the securities and not the borrower.

[w4rma]

4. Why? Is this a plan by and for the Federal Reserve?? BAD!!! (nt)

[Skink]

5. Atleast they got Madoff.

[bottomtheweaver]

17. No, Madoff turned himself in.

He'd probably be sucking down TARP funds if he hand't.

[No Elephants]

28. I thought his sons turned him in?

[pitohui]

29. i also heard his sons turned him in EOM

.

[Mr. Sparkle]

6. The Republicans are looking after their base... I'm Shocked

Will not ONE Democrat shout from the rooftops about this, these hedge fund speculators are what brought down this economy! imho

[pjt7]

7. Don't kid yourself, plenty of hedge funds

are D's.

Chuck Schummer & Barney Frank ain't going to help out here.

[Mr. Sparkle]

23. i suspect your right, but i think the republicans are way more in indebted to Wall Street than us.

[snot]

8. k&r'd

[sarcasmo]

10. A swindle that is beyond epic. Hedgefund have no right to this money.

Wasn't this money to be used so banks could free up credit. To quote Operation Mind Crime "Thank God it passed"

[SOS]

11. Hedge funds are, by definition, high risk ventures for the rich

Now WE have to pay THEM for their losses?

If you lose your pay check at a roulette table in Atlantic City, will the Fed cover that too?

[Porschenut1066]

12. Yes if you are a 1. Wall Street Banker, 2. Hedge Fund 3. Large republican contributor etc..

[natrat]

14. 4. large democratic supporter

chriss dodd and barney frank and schumer etc are uber whores

[jazzjunkysue]

13. Just sickening.

Their greed is beyond comprehension, and all the while, they shove jesus in my face and tell me I'm the immoral one.

[jpak]

15. SOMEONE CALL THE FUCKING COPS

W.T.F.

[bottomtheweaver]

16. Are these the outfits that aren't regulated?

The ones so completely crooked they found a way to avoid federal scrutiny altogether? AND NOW THE FEDS ARE BAILING THEM OUT WITH OUR MONEY?

:wow:

[BelgianMadCow]

20. Yep. What Paul Krugman called shadow banks

it is simply baffling, yes. Mindboggling.

[Robbien]

21. Not only are they not regulated, they don't generate tax income for the govt

Salaries paid by hedges aren't taxable (through a loophole) and income they earn are mostly recorded offshore.

[Odin2005]

18. WTF? Isn't this the same Crony Capitalism that caused the '97 Asial Financial Crisis?

:grr:

[bottomtheweaver]

19. So if your ponzi scheme is hitting the skids, help yourself to a truckload or two

of federal cash before somebody figures out that's all been swiped too. Sorry about the Social Security thing folks, but you'll find a way to get by.

:wow:

[ozone_man]

22. Has anyone concluded that it's time to abolish the Fed?

Surely they don't act in our best interests, yet we get stuck with paying for their reckless monetary policy.

[Frank Booth]

24. This is a complete travesty. We're quickly moving from a plutocracy to a

kleptocracy.

[Hawkowl]

25. Fucking Thieves!!!

Folks if this is allowed to continue, there is NO WAY IN HELL we are going to avoid a BUSH DEPRESSION. All this "bailout" package has done is a Herbert Hoover redux and then some. More wealth transfer to the whores, criminals and thieves that are deliberately killing our economy.

I truly am dismayed.

[pa28]

26. Probably just the beginning.

I can see Madoff's clients getting relief. That could open the door for other un/der regulated entities getting "relief" as well.

And isn't it interesting how the fed is using it's vaguely defined powers to extend "relief" by creating new money through guarantees (nearly 3t and counting) outside the authority of congress in a totally unprecedented way. Does anybody at all think this will end well?

[western mass]

27. and we have the Congressional Democrats to thank,..

Lest we forget who was responsible for ramming the bailouts through in a way that made all of this possible.

Please spare us the "how could they know?" excuses. You can keep believing that the Democrats in congress are a bunch of starry-eyed Forest Gumps, or you can come to the more likely conclusion that they are shrewd and intelligent politicians who are very good at looking after the interests of the corporate masters who pay the bills, and who knew very well what the lying, thieving Bush admin would do with they were given.

[lonestarnot]

30. Son of a bitch!

A stinging observation. I'm sick of a few of them. This cannot be allowed to happen!