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From Kirsten Bischoff, Opalesque New York:
The response to the Term Asset Backed Securities Loan Facility (TALF) program created by the US Government and launched in March 2009 has not been enthusiastic.
The program was structured to last until December 2009 and had an initial goal of sending $200bln into the consumer credit markets.
With the April auction resulting in only $1.4bln in securities (bringing the program's two-month auction total to $3bln), TALF has thus far fallen woefully short of expectations.
However, the recent announcement of two new TALF funds (Princeton Alternative Investments and Altravida Partners) entering the mix may be the first sign that investor interest in the consumer credit markets is beginning to gain traction.
Critics fear too much oversight
Critics of government oversight in the finance markets have made the argument that private firms have resisted the opportunities in such programs as TALF and TARP because of the unknown and sudden legislative/oversight shifts that seem to loom in the shadows.
In a recent Bloomberg commentary Caroline Baum said "The Treasury is providing as much as $20 billion of TARP funds to protect the Fed from losses. That means TALF investors may be subject to TARP constraints, unless the six degrees of separation somehow creates an exemption."
Transparency as a stabilizing force
Although such pendulum swings in ...................... To view our full article Click here
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