On Aug 22, 2007, at 3:36 PM, Michael Pollak wrote:
> I think the point is that they are supposed to borrow billions from
> the
> discount window and use it to buy asset-backed commercial paper.
> They'll
> pass all the risk onto the fed by using them as collateral, so it
> will be
> like printing money for them on the difference.
Oh yeah, I get the rationale, but it's still very odd: there used to be a stigma to borrowing at the discount window, and now it's behavior for role models. It's as if I were to take up crack to set an example for young Ivan.
Doug