Forbidden Donut

What do you specifically mean by purchasing programs?

/cause it's vague enough wording that I could lump defense procurement in there, and I don't think that's what you mean.

Sorry. I intended to ask about Treasury and/or the Fed's purchasing programs.

I was under the impression that many of those programs were temporary. Like the MBS one, I think, has to stop by the end of '09. And I think the CPP has to stop sometime around there too.

Those are the only two I'm at all familiar with, but if I had to guess I'd say there's at least a half a dozen.

Do you have a point? Or are you actually just quizzing us?

I have two points for me asking.

One: I have not found a consolidated list for these programs, which makes me scratch my head.

Two: For as well-educated as the people who debate on these forums, I was curious to know if people actually know where hundreds of billions of dollars is being spent.

And all the programs I know of have ending dates. But they also can be easily changed to ensure the the program does what it was intended to do.

AIG had HUGE exposure in the Credit-Default swap market and was on the verge of collapse. This was a systemic problem because many banks, investment funds etc often "borrowed" AIG bonds and CDS swaps for short periods of time in exhange for AIG holding an equivalent amount of cash from the bank etc as collateral. (done to facilitate certain accounting practices, short sales, etc) at the end of the swap AIG gets its bond back and the bank gets its cash back minus a small fee. It's a low-margin business, so AIg has to make its money up in volume, so they had literally millions of these trades going on at the same time. To make matters worse AIG invested the short -term cash they were holding in risky CDO's like RMBS'es

When mortgage-backed securities started to go south, and Aig looked very exposed because of all the Credit default-swaps they'd written on them. All of those people who had cash for bond swaps with them panicked and wanted their cash back. Which of course AIG couldn't readily give them because instead of sinking it into something safe, they swung for the fences and but it into CDOs whose market was crashing around their ears.

The money was spent on a black hole in order to keep unemployment from rising about 25% and homelessness from rising to about 15 - 20%. We had to keep the commercial paper market from completely collapsing because that would have brought our entire system down with it. To do this we had to infuse many... many markets with tons of cash. That means commercial paper first. MBS's second. There are also more general tools provided to the FED as a result of the bubble-pop that can't really be nailed down as one kind of purchasing. We now allow primary lenders to borrow directly from the Fed if they can provide acceptable collateral. This is *sort of* purchasing. I think there's also something with money market investments that they are not permitted to engage in. But it's also not exactly purchasing.


Try this list of Fed Assets. It's not complete or specific. It doesn't outline the programs explicitly, and it's just the Fed, and not the treasury. But since it includes all the fed's current assets, you can kind of extrapolate how they were acquired.

That money is gone. In exchange we are not all eating cat food on the streets. What I DON'T like is what you don't like... which is the complete lack of transparency.

/not an expert
//this is my fairly limited understanding of how close we came to complete economic failure

This is the fundamental reason why Ron Paul's audit-the-fed bill has been introduced so frequently over the years and is now gaining so much support in congress. This is an organization that was set up with absolutely zero oversight nor any expectation of transparent practices.

I can't tell you where all our money is going; I would be absolutely astonished if the small handful of people that do know would be willing to talk about, and I guarantee that no one on this forum will belong to that group.

I doubt that it will happen. No matter who supports it.

It doesn't score major re-election points. "And I voted to audit the fed, which resulted in a 2,500 page report that nobody read for any reason other than to dig up facts that supported their side so they could score political points for their side, leaving you, my constituents confused and still largely in the dark. Vote for me."

It already has a veto-proof majority in the house, it just needs to attract more support in the senate (currently at 24 co-sponsors) and actually get out of the financial services committee. It's by no means a sure thing, but it isn't a fringe bill like some might assume.

You sound like you've been following this bill, while I certainly haven't. 24 co-sponsors is pretty damn good.

It has 263 co-sponsors in the house /smile.gif" style="vertical-align:middle" emoid=":)" border="0" alt="smile.gif" />

289 according to the website.

/signed the petition... for whatever that's worth.

In my haste I subtracted the senate co-sponsor total from HR 1207 which obviously was pretty stupid. Nonetheless, I thought the total was 287, so I am happy to see two more signed on.

Seriously, I heard about this shit when it was introduced (February I think?) and figured it died immediately. It's a bill I can agree with 100%... which I was previously certain was impossible.

It's awesome, and I'll follow it now that I see it has some traction. I'll be tossing a nice form letter along to my past and current Senators.