Mon, Aug 29, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: The Financial Stability Plan has been lost in translation

Tuesday, March 03, 2009

This article was authored by Shahriar Shahida, CIO, Constellation Capital Management, New York.

The fact that the markets seem to hate the financial rescue plan is no secret. The question is, are they being too hasty in doing so? Secretary Geithner talks about a public-private partnership for working through the current crises, but what does he really mean? Many taxpayers are repulsed by the notion of continued infusion of taxpayer funds into the black hole of bank balance sheets. They argue that the government should not buy toxic assets above market levels (as the banks wish it to), unless they share in the upside. In turn, the banks argue that current asset prices merely reflect the total loss of liquidity in the markets, and not the true fundamental value of their underlying investments. Forced liquidations in a market with no liquidity only add to the systemic risk and lead to greater asset devaluation, in the process compounding our economic travails.

So what is this poor administration to do? Well the fact is that right under everyone’s nose, everyone that is, who cares to dig deeper, there is a very elegant solution that has already been proposed and is embedded in the government’s Financial Stability Plan.

Under the Term Asset Backed Loan Facility (TALF) program, a key component of the Financial Stability Plan, the Treasury has offered to provide US investors with non-recourse financing to buy newly created asset backed securities. I......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Strategies - The 'Holy Grail' hedge fund strategy to handle a black swan the size of World War I, Hedge funds get more pushback on terms as enthusiasm for strategy wanes[more]

    The 'Holy Grail' hedge fund strategy to handle a black swan the size of World War I From IBTImes.co.uk: To illustrate a strategic gap common to today's portfolio managers, George Sokoloff, PhD, founder and CIO at Carmot Capital, proposes an interesting thought experiment – a breakdown of

  2. Institutional investors - Investors set to increase allocation to private debt, With investment income key, Richmond retirement system faces funding challenges[more]

    Investors set to increase allocation to private debt Investors are set to increase their allocation to private debt, with 60% revealing they believe the private debt market will grow over the next 12 months, according to a new study by Elian, a leading funds services provider. 41%

  3. Investing - Hedge funds snap up banks, unload Apple, Some of hedge funds' favorite stocks are finally starting to beat the market, Einhorn's Greenlight shifts positions, Treasury yield climbs to two-month high as Fischer joins hawks, 9 stocks smart investors put their money in last quarter[more]

    Hedge funds snap up banks, unload Apple From Barrons.com: Prominent hedge funds have a newfound love of big banks, and some have a distaste for shares of Apple, regulatory filings released last week show. The filings suggest that the funds have been pivoting their portfolios in recent mon

  4. Chesapeake energy seeks $1 billion loan to refinance debt[more]

    From Bloomberg.com: Chesapeake Energy Corp. is seeking a $1 billion loan as the company battered by cratering fuel prices and credit downgrades takes a step to address its $9 billion debt load. The natural gas producer hired Goldman Sachs Group Inc., Citigroup Inc. and Mitsubishi UFJ Financial Group

  5. Institutions - Nordic pension funds magnify focus on unlisted and direct investing, building up teams[more]

    From IPE.com: As bond yields remain at low or negative levels, pension funds and other institutional investors in the Nordic region are stepping up efforts to find higher returns by adding more unlisted investments to portfolios and are expanding in-house teams in order to do this, according to new