Numbers, numbers: the Fed has committed half its money so far
If Steve Waldman has his math right — that is, if we’re interpreting the Fed’s statements correctly — Bernanke and co. have now committed $400 billion to TAF, repos, TSLF. That’s almost half the Fed’s balance sheet effectively placed in non-standard assets. Wow.
Krugman also mentions the latest foray (the quite daft Term Securities Lending Facility):
So basically the Fed is going to be swapping Treasuries for dubious securities, in an attempt to give the market a REALLY BIG slap in the face.
Similarly panned at the blog the Big Picture, who also advises going “crazy short” if the market’s spiv rally starts to fade (I would say “when”, but I’m a pessimist. “Spiv”, by the way, is an Australian term – actually it’s from all over, but used still in Australia to describe something that looks good on the surface, but whose sheen will soon fade as it falls to bits around you).
“Spiv” economy is, for me, a pretty decent catch-all for this government, its economy and all of its economic credentials (their orchestra isn’t too too bad). Good on the surface, talked-up like all good games but, faced with the famous question of Donald Sutherland:
Pinkley: [impersonating a general] Very pretty, General. Very pretty. But, can they fight?
No – it/they cannot fight. Oh, for a body of government that hadn’t eaten Fukuyama for bloody breakfast every morning for a decade!