Monday, August 17, 2009

The Debts of the Spenders: US Officials Extend TALF into 2010

Oh well. This doesn't really come as a surprise. The Feds had been on a hiring binge to attract structured finance personnel (the same people who had previously created these problems).

At the last FOMC meeting, Bernanke and friends set October as a deadline for the end of POMO Treasury purchases. But more unconventional measures of quantitative easing remain - particularly in the private sector loan markets. The fact that the Feds had to extend the TALF further into next year is a sign that policymakers believe the recession will continue to deepen.

WASHINGTON (Dow Jones)--The U.S. Federal Reserve and Treasury Department extended into next year their Term Asset-Backed Securities Loan Facility, a key program aimed at boosting the flow of credit to businesses and households and the distressed commercial real estate market.

The extension is a significant committment from U.S. officials to continue to help the economy recover from the financial crisis amid ongoing troubles facing the commercial real-estate industry and continued fragility of credit markets.

Government officials had previously announced that they would authorize TALF loans through Dec. 31. But with markets for certain securities still suffering, officials said Monday they will extend TALF loans against newly issued asset-backed securities and legacy commercial mortgage-backed securities through March 31, 2010.

The Fed and Treasury also approved an extension of TALF lending against newly-issued commercial mortgage-backed securities, or CMBS, through June 30, 2010, pointing out that new CMBS deals can take a significant amount of time to ar
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