Sign In
SHARE
Bernanke Invents a New Weapon
Do you know your TAF from your TSLF? Frankly, it doesn't matter if you don't. Think of Ben Bernanke as action hero: every time the credit markets seize up and threaten to bring down the US financial system, he pulls out a new weapon. First it was rate cuts, then it was the Term Auction Facility, now it's the Term Securities Lending Facility, or, as Paul Krugman calls it, "an attempt to give the market a REALLY BIG slap in the face".
The markets are up today, of course: they love it when Bernanke fires up his helicopter. And I'm actually reasonably hopeful that this latest liquidity injection* might work for more than a few days, if only because the securities hit in the latest credit crunch (agencies, municipals bonds) are genuinely remote from any real risk of default.
The FT has links to all the other central banks releasing statements at the same time; Mish, meanwhile, worries that with this latest action Bernanke is "running out of bullets". Again, I'm slightly more sanguine: the Fed seems to be able to cast new bullets at will. They're not enough to prevent a recession, of course. But they might at least be enough to keep the markets functioning relatively smoothly on the way down.
*Yes, a liquidity injection. The action doesn't increase the total money supply - it's what's known as "sterilized" - but it does increase the amount of liquid cash in the banking system.
Loading...
Thank you for registering as a Portfolio.com Insider. Your comment has been added.
Create Your Public Profile
- The Times' Rorshach Geithner Story
- Apr 27 2009 9:26AM EDT
- Sinking Animal Spirits
- Apr 27 2009 8:45AM EDT
- Counter-cyclical Urban Policy
- Apr 26 2009 10:00AM EDT
- Be Your Own Counterfeiter
- Apr 26 2009 9:36AM EDT
- Being Tim Geithner
- Apr 25 2009 12:37PM EDT
- Notes From a Press Conference Naif
- Apr 25 2009 9:41AM EDT
- What Good is the News?
- Apr 25 2009 8:32AM EDT
- Stressful Enough
- Apr 24 2009 2:29PM EDT
- Not Regretting the Pound
- Apr 24 2009 1:09PM EDT
- Introducing the New Ford Squeeze
- Apr 24 2009 9:47AM EDT
- Non-Economic Questions of the Day
- Apr 24 2009 9:12AM EDT
- The Stress Test Blind Alley
- Apr 24 2009 8:36AM EDT
- Happy Hour
- Apr 23 2009 9:40PM EDT
- Recovery Without Rebalancing
- Apr 23 2009 6:13PM EDT
- The Shape of Your Recession
- Apr 23 2009 5:11PM EDT
Archive
Categories
Links
- Email Ryan Avent
- Econospeak
- Financial Crookery
- The Epicurean Dealmaker
- Naked Capitalism
- Alphaville
- Marginal Revolution
- The Panelist
- FP Passport
- Overcoming Bias
- Andrew Leonard
- Barry Ritholtz
- Brad Setser
- Carbon Tax Center
- Calculated Risk
- Greg Mankiw
- Free Exchange
- Dean Baker
- Alexander Campbell
- Kash Mansori
- The Bayesian Heresy
- A Fistful of Euros
- John Quiggin
- Michael Mandel
- Lance Knobel
- Mark Thoma
- Dan Gross
- Curbed
- Streetsblog
- Chris Anderson
- Deal Journal
- MarketBeat
- DealBook
- DealBreaker
- Carl Bialik
- Michelle Leder
- Brad DeLong
- Ultimi Barbarorum
