Fed Takes Bold Steps to Ease Crisis

[Gman]

Source: AP via Yahoo News

WASHINGTON (AP) -- The Federal Reserve is urgently moving to contain a deepening credit crisis and restore confidence in panicked financial markets by becoming a lender of last resort for Wall Street investment houses, which were able to secure short-term emergency loans beginning Monday.
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"These steps will provide financial institutions with greater assurance of access to funds," Federal Reserve Chairman Ben Bernanke told reporters in a brief conference call Sunday evening.
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The new lending facility -- described as a cousin to the Fed's emergency lending "discount window" for banks -- is geared to give major investment houses a source of short-term cash on a regular basis -- if they need it.

That's important because those big investment houses have key roles in the financial system and if one fails or is having difficulty it could put the whole financial system in jeopardy, said Mark Zandi, chief economist at Moody's Economy.com. These big investment houses have complex relationships with many players in the system, including hedge funds, commercial banks and others.

The lending facility will be in place for at least six months and "may be extended as conditions warrant," the Fed said. The interest rate will be 3.25 percent and a range of collateral -- including investment-grade mortgage backed securities -- will be accepted to back the overnight loans.

Read more: http://biz.yahoo.com/ap/080317/fed_credit_crisis.html

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Soooo.... in the long run, guess who ends up holding all the worthless subprime mortgage securities that are now and will be used as collateral for the loans from the fed???

The United States of America Treasury.

There must still be a few dollars left to steal before January next year.