And raised the debt ceiling for institutions.
Essentially, the Fed is going to take any old crap as collateral in exchange for Treasuries.
It's like you walk up with a load of crap, dump it, and get a handful of gold in return.
This, to me, signals the end game is under way.
There are only 2 paths after this move . . .
1. Credit markets stabilize over the next 18 months, a few institutions fail, and banks slowly work their way back into the black, repaying the borrowed treasuries and restoring the Fed's balance sheet in the process.
2. Credit markets continue to tighten, many institutions fail, and a point is reached at which a complete or near complete nationalization of the banking sector occurs, whether that nationalization is called as it properly exists or is called by some euphemism.
Odds of 1 -
1 in 1,000.
Odds of 2 -
Well I said there were two paths, so 999/1,000.
I'm personally looking for a the government of the USSA to take over banks, either through "loans", "capital injections", "bond/loan guarantees", and so on within 12 months.
The only prayer for reviving the banks is reviving the housing market, which seems, to me, impossible; there are so many people under water and so few people who would be qualified to buy at any price near where the markets are at today.
Massive Human Dieoff <b>must</b> occur as a result of Peak Oil. Many more than half will die. It will occur everywhere, including where <b>you</b> live. If you fail to recognize this, then your odds of living move toward the "going to die" group.