Sat, Dec 20, 2014
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. Investing - Big hedge funds win again on PetSmart, Riverbed, RBS sells real estate loans to hedge fund Cerberus, Talisman energy speculation: Which hedge funds could benefit?[more]

    Big hedge funds win again on PetSmart, Riverbed From CNBC.com: Another week, another set of wins for activist investors. On Sunday, pet supply retailer PetSmart agreed to the largest leveraged buyout of the year at $8.7 billion. Hedge fund firm JANA Partners had been pushing for a sale a

  2. Outlook - Hedge fund manager who remembers 1998 rout says prepare for pain, Bond guru Bill Gross predicts U.S. economic growth to dip to 2%[more]

    Hedge fund manager who remembers 1998 rout says prepare for pain From Bloomberg.com: Stephen Jen landed in Hong Kong in early January 1997 as Morgan Stanley’s newly minted exchange-rate strategist for Asia. He was soon working around the clock when investors began targeting the region’s

  3. Investing - Hedge funds get boost from healthcare in 2014, Paulson & Co takes stake in Salix on heels of inventory issues[more]

    Hedge funds get boost from healthcare in 2014 From Valuewalk.com: The healthcare sector started the year on a turbulent note, as stocks of many major biotechnology companies were battered. However, most of the players in this sector have bounced back. The BarclayHedge Healthcare & Biotec

  4. Comment - High fees and low performance hit hedge funds[more]

    From FT.com: Disenchantment over high fees and lackluster performance may finally be turning the tide against hedge funds, fresh data suggest. Despite generally weak returns since the global financial crisis, hedge funds have enjoyed positive net inflows every year since 2010. This helped assets und

  5. Performance - Lansdowne, Man Group, other hedge funds profit from shorts in oil, Turmoil boosts hedge funds that bet against Russia, oil, CTAs post strongest returns since December 2010[more]

    Lansdowne, Man Group, other hedge funds profit from shorts in oil From Valuewalk.com: The rising short interest in oil companies implies that the worst for oil is yet to come. Data from Markit shows that short exposure in energy sector of S&P 500 is still looming close to the highest mar