Tuesday, June 16, 2009

Banks Don't Need a Bail Out Any More

Ok, I admit, the title is a bit of a stretch. The Federal Reserve press release came out with the title "No loan requests were submitted through June 16 CMBS TALF operation".

Still, it's significant that no one needs any Asset Backed Security loans from the central bank today. Why not? How are they managing the debt? Aren't the banks supposed to still be on the verge of collapse? After all, Robert Prechter is still touting the demise of the U.S. AAA credit rating.

Well, some might say the banks are simply back to the same old tactics of denial and self-deception. I say half a trillion dollars of quantitative easing can't go unnoticed. Well, we might not see it, but the invisible hand of the market knows full well there is a lot of money sitting around that needs a home. There just aren't many places to put it other than stocks, bonds, and currencies, and the banking system has quite a hand in that middle tier.

1 comment:

  1. One thing that may be playing into this is that maybe the banks don't want anymore federal money in an attempt to limit how much they have. That way, they have less they need to pay back and can do so faster and get out from under the government's thumb? I'm not saying that is the only reason, but maybe a contributing cause?