MMIFF !
Not MILF, you perverts — MMIFF! Its the latest Fed funding mechanism, the Money Market Investor Funding Facility:
"The Federal Reserve Board on Tuesday announced the creation of the Money
Market Investor Funding Facility (MMIFF), which will support a private-sector
initiative designed to provide liquidity to U.S. money market investors.Under the MMIFF, authorized by the Board under Section 13(3) of the Federal Reserve Act,
the Federal Reserve Bank of New York (FRBNY) will provide senior secured funding
to a series of special purpose vehicles to facilitate an industry-supported
private-sector initiative to finance the purchase of eligible assets from
eligible investors. Eligible assets will include U.S. dollar-denominated
certificates of deposit and commercial paper issued by highly rated financial
institutions and having remaining maturities of 90 days or less. Eligible
investors will include U.S. money market mutual funds and over time may include
other U.S. money market investors."
And I said 2 to 3 trillion! How quaint . . .
>
Sources:
Federal Reserve announces the creation of the Money Market Investor Funding Facility (MMIFF)
Federal Reserve October 21, 2008
http://www.federalreserve.gov/newsevents/press/monetary/20081021a.htm
Fed Sets Up New Program to Buy Money-Fund Assets
Craig Torres
Bloomberg, Oct. 21 2008
http://www.bloomberg.com/apps/news?pid=20601087&sid=agNqzG4X0j0I&
October 21st, 2008 at 10:06 am
Yeah…
BUT WILL THEY TAKE MY ARP’S???
October 21st, 2008 at 10:14 am
so when does the Fed start issuing CDOs and CDS and whole brand new derivatives we haven’t even thought of yet? How about TITS==Treasury Institutionalized Trust Securities?
October 21st, 2008 at 10:15 am
Xenu damn it, all my taxpayer money going to this crap, it’s got me MMIFFed!!
(Sorry, had to, still need coffee…)
October 21st, 2008 at 10:16 am
You need some Advanced Structure Securities to go with those TITS?
October 21st, 2008 at 10:20 am
noisewater:
So on the trading floor you would hear
“TITS up” and “Dump those ASSes”
October 21st, 2008 at 10:21 am
Half to three-quarters of GDP is what I’m guessing this bailout is going to cost. So many zeros, so little time…
Regards,
TDL
October 21st, 2008 at 10:25 am
Headline says Fed to provide $540 Billion to MM funds… from whence do all these $$ come? …have mercy on us
October 21st, 2008 at 10:27 am
How about Securitized Asset/Liability Assessment Derivatives?
“The numbers came in below expectations.. Damn my SALAD’s gettin tossed!”
And brokers for that? SALAD Shooters…
October 21st, 2008 at 10:28 am
Or Collateralized Liability Index Trades?
I’ll stop now, still need coffee
October 21st, 2008 at 10:29 am
folks – so many of you don’t seem to understand what a cost is…when the gov’t INVESTS money and gets it back, that’s not a COST…get a clue and get educated!
October 21st, 2008 at 10:37 am
ted, what do you call it, then? “A sure thing.”?
October 21st, 2008 at 10:38 am
Ted,
Really? You are telling us to get a clue? The key part of your statement is “gets it back”!!!! Has it gotten any of it back yet? Are you so naive as to think that the gov’t will get it back in its entirety? If not then how much of it will it get back??? Based on the rank incompetence displayed by the gov’t and the unbridled greed displayed by the banks, I think its safe to assume that the gov’t will get next to nothing back.
Come on Ted… come join us in the reality based community.
October 21st, 2008 at 10:45 am
We’re in the money, la da da da da.
October 21st, 2008 at 10:48 am
Markets I’d Like to Flee? What’s perverted about that?
October 21st, 2008 at 10:49 am
“and gets it back”
The words, slim and none, come to mind.
October 21st, 2008 at 10:57 am
really, do they have program to create these names or what and who set it to suggestive titles
October 21st, 2008 at 10:59 am
So those who sat in Government money funds received less interest, while those who took additional risk and received additional interest get bailed out. They need to throw out all the econ books about risk/reward tradeoffs and emphasize that in America, there is a “free lunch”. If an investor received 3% returns in the traditional money fund, while those in govt money funds received 1.5%, couldn’t they absorb some small hit to NAV? I become more pissed everday.
October 21st, 2008 at 11:07 am
Sorry, I’ve been too busy surfing internet porn to keep up with the news. Did you say there’s a MILF crisis? Holy sh*t!
If we run out of MMIFFs we can always turn to the Barely Legal Twins: Paulson Supply Side Yield and the Bernanke Jumpstart.
October 21st, 2008 at 11:10 am
IMHO it is useless to discuss every single funding mechanism.
The question is if the FED/ CBs should step in to replace interbank lending. If the answer is yes, why collateral at all? Interbank lending is usually without collateral. If the FED shouldn’t do the job for banks, then collaterals don’t matter either.
So if we replace interbank lending, where should all the collateral come from (practically speaking)? Banks now issue bonds on their credit portfolio and use it as collateral at the CBs (at least in Europe). Lots of operational problems, but nothing gets better by doing so.
The mistake banks (and corporations) did in the past was to ignore matching maturities. A rule I learned some 30 years ago. Wonder how banks will earn money in the future if they change that back.
October 21st, 2008 at 11:15 am
Jamman, as someone who moved my $ from the Vanguard Prime MM to the Vanguard Treasury MM about a year ago I totally agree with you. It says right in the F-ing prospectus that a MM is not insured and you can lose principal.
So if they break the buck and lose 3% BFD, they were taking a risk. Worse is the people getting the bailout are the ones with the least need. The president balked at spending a few billion for poor children’s health care (S-CHIP) and now its OK to bailout the MM funds of millionaires!
October 21st, 2008 at 11:25 am
I only wish the Fed would leverage up 30:1 so we taxpayers could earn some real money for a change.
October 21st, 2008 at 11:27 am
Well at least we have the best and brightest auditors working on the TARP…
Treasury hires PricewaterhouseCoopers, Ernst & Young to help with bailout plan.
Tough Questions for AIG’s Auditors (Pricewaterhousecoopers)
PricewaterhouseCoopers was Freddie Mac’s auditor
Lehman Brothers was audited by the New York office of Ernst & Young
I know that’s not really fair b/c the Big 4 were all tied into the financial firms, but it seems like this could be a PR nightmare for Mr. Paulson.
October 21st, 2008 at 11:28 am
R Timm, we manage money and moved all our clients to treasury funds about 18 mos ago. We are no longer a capitalist economy..nuff said.
October 21st, 2008 at 11:31 am
those guys have already done a good rehash of this new idiotic program.
http://ftalphaville.ft.com/blog/2008/10/21/17276/revenge-of-the-siv/
October 21st, 2008 at 11:39 am
I am waiting for the “mutual fund made whole” bailout provision. No fund left behind…Americans deserve better than to experience anything less than 8% per year returns. After all that is the minimum they were planning on, due to the Greenspan put.
October 21st, 2008 at 11:41 am
The problem here is lack of vision…these fellows in charge here are plugging the dike, not building a new dam..
What do you mean?
We are not trying to cut other federal spending in any fashion.
Our next stimulus plan, which Bush was opposed to, will put is even further in the red, and now he’s agreed to it in principle. There has been no serious discussion of whether it is needed or aimed at the right problem..
Still no taxes on imported oil, a source of revenue gone, and alternative energy sources are now dying on the vine.
We’ve talked for years about the debt we are leaving to future generations, but nearly all (in power anyway) have been silent about how much worse this leaves those generations.
We are learning here. It will be the same old same old…
Barney Frank said yesterday on CNBC that his plan for taxes on the wealthy would have to wait until the crisis was over…that means no hint of decreasing the deficit next year..
October 21st, 2008 at 11:47 am
The deficit next year will be bigger than Hillary’s ass…count on it…and 2010 won’t be any better. Dollar will go down faster than Monica Lewinsky.
October 21st, 2008 at 11:51 am
Chances are very good this is the second leg of the crash.
October 21st, 2008 at 11:59 am
market should plow down really fast like Nasdaq crash.
October 21st, 2008 at 12:01 pm
In anticipation of the Lehman CDS settlement thread:
Pay-up time for Lehman swaps
Certainly, some of the biggest players, such as the fully nationalized AIG and the nine partly nationalized banks, are big players in this game. It is inconceivable that some of them are not on the underwriting side and have sold the protection, irrespective of whether the buyer actually held Lehman debt or was just another gambler in the market. Now an interesting new dilemma is appearing: will the US Treasury accept that potentially huge sums of taxpayer money be used to pay speculators who were right in guessing that the US Treasury would allow Lehman to fail…
Being among those who have to shell out $190 billion is enough to give other institutions a powerful push in the direction of insolvency. For this reason alone, the US Treasury is facing a serious choice: use taxpayer money to reward speculators or try to limit the damage. One possible avenue would be to demand that those who have bought protection actually prove that they held Lehman debt, and pay them, but refuse to pay those who had speculated. This could be a politically attractive way out of an interesting moral dilemma.
Anyone else smell nullification? That’ll do a number on SKF :/
October 21st, 2008 at 12:13 pm
And of course the Bank of America CEO admits his bank didn’t want the bailout money but was told to take it…TAKE IT…
I just wonder how much debt we’ll have in 12 months…and I think we’re going through the recession anyway…
October 21st, 2008 at 12:21 pm
Ok. Now I’m really starting to worry. All of the solutions to date are supply side — even the Spring stimulus was supply side.
October 21st, 2008 at 12:34 pm
“We are not trying to cut other federal spending in any fashion.”
And we never will, Bruce. That song simply doesn’t play in Springfield…
We had a politician once who attempted to speak to the American people as if they were adults….and he told us we had to break our foreign oil dependency.
He was crushed in the election by a actor-turned-governor who painted a fairytale picture that all we had to do was close our eyes and click our ruby heels together and the best was yet to come.
We all fell for it. None of us wanted to face reality.
Has anything really changed?
October 21st, 2008 at 12:42 pm
I think we are gradually becoming desensitized to the meaning of “billions” and “trillions.” Really, who can grasp what these numbers actually mean? Certainly they have nothing to do with my concept of the value of a dollar in personal terms.
There is a huge “decoupling” going on here, between everyday experience and the uncharted realms of the virtual global economic empire now being born, as we watch from the other side of the screen, some of us wringing our hands in dismay.
October 21st, 2008 at 12:46 pm
So assuming the money the “FED” is putting out there doesn’t actually make it back into the magic piggy bank from whence it came….does this mean we are doubling the money supply and that all your savings just got cut in half?
October 21st, 2008 at 1:09 pm
Another $540 billion on the pile. Yeah, it’s a loan; whatever. At this rate, how much longer is the U.S. going to retain a AAA credit rating?
October 21st, 2008 at 1:36 pm
ted:
It’s not “when” the government gets “the” money back, it’s “if” the government gets “our” money back.
I don’t think the government is investing. It’s a gamble, at best (and doubling down on every loss).
As for cost vs, ROI, didn’t the same government say that the Iraq war would pay for itself? What do we have now? A black hole of debt (and dead people). Isn’t this the same government that is keeping my Social Security money safe (so I don’t have to get crushed in the market)?
I don’t think the government should be involved in saving private interests. How in the hell can anyone compete against the government?
October 21st, 2008 at 2:01 pm
If the U.S. can’t repay its debt, I think we leave the realm of market analysis and enter the realm of defense analysis.
October 21st, 2008 at 4:15 pm
If the Gov does make a profit, do you think they will get out of the finance business? No way. The Fed will own part of the financial system forever. The Treasury does not say no to a revenue source.
October 21st, 2008 at 5:07 pm
When do they guarantee my loan with Sears for my freaking lawnmower??
My God!! It must be bad!! This is absolutely for the history books. They are throwing money everywhere. They must be scared shitless.
And if they continue to do much more they are going to scare me shitless as well!
With bailout, after bailout…day after day after day, they are really beginning to spook me, no shit!
October 21st, 2008 at 5:23 pm
ominous music (from Jaws)
debt shark approaching.
Fresno dan pooping his pants “We’re gonna need a bigger helicopter!!!”
October 21st, 2008 at 5:50 pm
This is money laundering! Very much akin to the AIG bailout of G/MS. Smooth criminals those are.
Then given merely mediocre 3rd quarter results, do think about what 4th quarter results will need to absorb in order to fit everything into the audited annual report! These ain’t big baths but blood baths.
The crisis certainly comes just in time as baby boomers lay claim on their pensions. Their schemes are grossly underfunded and corporate CFs insufficient. Anyone opting to exit this life will need to be rewarded big time. Conflicting gangs, murderers likewise. We overstretched it.
And if anybody is pointing fingers at Greenspan, then three fingers are pointing back towards him or her. What’s the plan to get out of this mess? Yup, cut reserve ratios, accept donuts for collateral and just keep feeding the bulging bellies. This is merely time shifting the problem.
October 21st, 2008 at 7:27 pm
“The deficit next year will be bigger than Hillary’s ass…count on it…and 2010 won’t be any better. Dollar will go down faster than Monica Lewinsky.”
That was hilarious….
October 22nd, 2008 at 2:54 am
Fresno Dan — LMAO!!
“We’re gonna need a bigger helicopter!”
Can anyone here draw? That’ll be the mother-of-all-cartoons about this situation.