Just saw on TV - Thoughts?

On Bloomberg TV, some analyst from Europe somewhere said something to the effect of: “The US Federal Reserve is now the worlds largest hedge fund, with almost 800 billion in toxic illiquid securities on its balance sheet. The US governments socialist response of its problems will continue to weaken the dollar against other currencies” First do you agree? Second, with the exception of the exposure from Bear Stearns, aren’t the rest of those securities collateral against repurchase agreements, TAF lending etc?

He has a huge point.

http://www.geocities.com/northstarzone/FED.html

good point… I am being to wonder what the heck is going on … now should we be be asking ourself that the US government TBTF? sure, soemthing needed to be down to temper the effect of an AIG failure (although in a free market concept - its management did fail in its role) … but the whole package smells … an 80% equity ownership does not mean competitveness of a free market … so we have reached a ST goal, but what is the end game here for AIG?

I don’t want my government to bail out the US. These Americans are turning their country into some kind of banana republic :wink:

You have to make it to the end game to worry about the end game. The Edge Wrote: ------------------------------------------------------- > good point… I am being to wonder what the heck > is going on … now should we be be asking ourself > that the US government TBTF? sure, soemthing > needed to be down to temper the effect of an AIG > failure (although in a free market concept - its > management did fail in its role) … but the whole > package smells … an 80% equity ownership does > not mean competitveness of a free market … so we > have reached a ST goal, but what is the end game > here for AIG?

But aren’t all of those holdings only repo collateral? With the exception of 30 B from BSC, the rest is owned by the banking sector…correct?