The Fed's offering 28-day term lending with bad mortgages as collateral, in a $200 billion dollar temporary bailout.
Today's steps indicate the Fed is increasingly concerned about the investor exodus from mortgage debt, which threatens to deepen the housing contraction and the economic slowdown. While they fall short of the calls by some analysts for the Fed to make outright purchases of mortgage debt, the central bank left the door open to expanding the effort.
If the banks juggle this properly, doesn't it mean that treasuries show up in the balance sheet as opposed to bad debts?
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