Jul
25
From the article at cnbc.com:
“Banks stepped up their borrowing over the past week from the Federal Reserve’s emergency lending program, while Wall Street firms didn’t draw such loans.
A Fed report released Thursday said commercial banks averaged $16.4 billion in daily borrowing over the past week.
That was up from $13.9 billion in the previous week.”
The Fed is lending $80 BILLION A WEEK to banks in order to keep the economy going.
Even more interesting is this tidbit:
“In exchange for the 28-day loans of Treasury securities, bidding companies can put up as collateral more risky investments. These include certain mortgage-backed securities and bonds secured by federally guaranteed student loans.”
So the Federal Reserve is lending out money to banks, and in return it is getting the mortgages that no one else wants (because they’re not worth anything to anyone but the Fed) and government loans to students.
The Fed lends money, and what it gets in return… are loans with high rates of default and crappy mortgages.
Does anyone else see a problem with this?
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