Making loans to companies is relatively labor intensive, you need loan
officers, risk managers, attorneys, computer software and databases,
this is a whole mechanism that needs to exist. The Fed or Treasury
does not have that and it cannot be built overnight. I have hard times
believing that they can pull it off. This is also an area that is
prone to corruption.

So I am rather skeptical that the government will be able to actually
make those loans.

The issue that everyone is dancing around, is that a lot of banks have
negative equity due to falling asset prices and fixed
liabilities. Giving them more loans would not restore that equity.

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On Wed, 8 Oct 2008 22:15:43 -0500, "Andrew Koenig" <ark[at]acm.orgwrote:


- quote -


-HW "Skip" Weldon
Columbia, SC

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"My interest" <myinterest[at]gmail.com> wrote in message
news:5a799d38-adc9-4f60-bf15-832d4a80beea[at]m44g2000hsc.googlegroups.com...
- quote -

I would like to see them be punitive with banks that loan money from the Fed
and don't lend out (to other banks or to companies) at least 90% of those
funds. Banks have been taking the money from the Fed and immediately
reinvesting the money in Treasury bills, which does no good for the general
economy or other banks that do not have access to the Fed directly, and it
completely circumvents the Fed's ability to use monetary policy.

--
Will

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"My interest" <myinterest[at]gmail.com> wrote in message
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- quote -

Be patient.

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Fed announced it would buy commercial paper. This essentially means
that it will lend to non-financial companies directly in order to save
the real economy, (i.e. by-pass the banks who may just simply hold off
cash no matter what).

Treasury has got nearly $1Trillion at its disposal to buy whatever bad
assets at (effectively) whatever price.

So in case if this still cannot stop the bleeding, what else can you
think of the authority can do?

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