Thu, Apr 19, 2018
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. News Briefs - Agio launches cybersecurity suite for alternatives, Mother who ditched her hedge fund career to set up a healthy snack brand from her kitchen table now has a GBP 1.75m business[more]

    Agio launches cybersecurity suite for alternatives Agio, a provider of managed IT and cybersecurity services for the financial services, healthcare, and payments industries, announced today that it will launch Agio SkySuite, a fully-hosted public cloud productivity and cybersecurity suite

  2. Investing - Sequoia takes Facebook stake as shares slide in data controversy, $1.4b hedge fund sees intact fundamentals for Facebook, Jim Cramer reveals some 'suggested hedge fund trades' amid the Trump tariffs[more]

    Sequoia takes Facebook stake as shares slide in data controversy From Bloomberg.com: The $4.2 billion Sequoia Fund bought a small position in Facebook Inc. as the stock slid late in the first quarter, investment manager Ruane, Cunniff & Goldfarb told clients. "The recent controversy enab

  3. Activist Investors - Blue Sky-owned Wild Breads faces uncertain future[more]

    From AFR.com: A Blue Sky private equity investment in artisan-style baker Wild Breads enjoyed multiple valuation upgrades despite losing millions and breaching its lending covenants, accounts lodged with the regulator last week show. Wild Breads lost $2.4 million in 2017, but Blue Sky ascribed a hig

  4. Opalesque Exclusive: Barnegat to close hedge fund to outside investors on weak opportunities[more]

    Komfie Manalo, Opalesque Asia: Bob Treue's Barnegat Fund Management said it is closing its $666m fixed income relative value hedge fund to outside investors. "The negative side to gains in Fixed Income Arbitrage is that unless we find new opportunit

  5. Investing - Hedge fund makes a big bet on malls, British hedge fund manager Odey short UK government bonds on QE bet[more]

    Hedge fund makes a big bet on malls From Barrons.com: The dominant narrative on American shopping malls is that they're dead. Crushed by Amazon.com, many brick-and-mortar retail stores are destined for bankruptcy. And where is the most retail, clustered all together? Malls. From a