Re: borrowing as a public service
On Aug 22, 2007, at 3:36 PM, Michael Pollak wrote:
I think the point is that they are supposed to borrow billions from
the discount window and use it to buy asset-backed commercial paper.
They’ll pass all the risk onto the fed by using them as collateral, so it
will be like printing money for them on the difference.
Oh yeah, I get the rationale, but it’s still very odd: there used to
be a stigma to borrowing at the discount window, and now it’s
behavior for role models. It’s as if I were to take up crack to set
an example for young Ivan.
Doug