Tuesday, March 3, 2009

Feds Offer $1 Trillion In Loans

Here's your chance to get a part of President Obama's economic stimulus plan.

The Treasury Department and the Federal Reserve are offering up to $1 trillion in loans for businesses and households. The hope is that the Term Asset-Backed Securities Loan Facility, or TALF as they are calling it (everything in government has initials) will help small businesses and students get loans. As the parent of two college age students, I, for one, am all ears.

The money won't go directly to you and me. The TALF is designed to provide financing to investors to support their purchases of AAA-rated asset-backed securities. Apparently there are initials to describe this as well: ABS (not to be confused with the automatic brakes systems on our cars, but I digress).

The TALF was established, we are told by Treasury and the Fed, because the ABS market, which has historically been a critical component of lending in the financial system, have been virtually shuttered since the worsening of the financial crisis in October. The hope is that by reopening these markets, lenders will begin offering money to consumers and small businesses, helping to stimulate the broader economy.

Of course, there are more than just murmers of discontent among many Americans over the way this economic downturn is being managed by the government. Anger over billions of dollars in bailout money (issued during the Bush administration but supported by then President-elect Obama) that was not used to stimulate lending as hoped have soured many on the president's stimulus plan. But the TALF is designed to encourage lending to Main Street and to families. If it works, it should go a long way to making life a little bit easier for cash-strapped Americans. It should also help garner greater support for the president's economic recovery efforts.

We talk about these issues and more weekdays at 5 PM New York time on News Talk Online on Paltalk.com


Photo credit: http://www.flickr.com/photos/twcollins/751221191/


Anonymous said...

nice report Gary

Anonymous said...

The ABS light in my car keeps going on and off. I've had it fixed twice and it still is unpredicatable. I'm hoping it's just a glitch in the computer and will work in an emergency. After the billions of dollars that have Not been used to stimulate the economy, Like my car,I HOPE The TALF money will be available for families and small businesses for emergencies. Maybe I should take my car in again and have it checked out one more time to make sure it's working. Just as the government should.

Anonymous said...

by DESIGNED, do we mean that: if they do not loan this money to main street, then they may not use the money at all?
are there caps to the amount? bc, for instance, a million dollar loand wouldnt really be a loan to main street, would it?

i want specifics, and i find they are in terribily short supply.
which is not your fault at all.
thanks for sharing this. i have lost all hope of any of this working the way they say it will or should.

jane smithie

Anonymous said...

We don't actually HAVE $1 trillion in cash though. So if by printing more money or stealing from our grandchildren is how they are doing this then it is wrong and criminal. Stop the frickin' spending already! Journalists, how about actually doing your jobs and reporting on what is happening with all of this money with zero oversight?

Deborah Young

Anonymous said...

This sounds like another scam to me. How can we really trust anyone in the Treasury Dept. They SAY it;s going to make it easier for us to get loans and funds. As a small business owner myself, Trying to get a loan for my business has been next to impossible. I really don;t see this doing anything but putting money into the pockets of the banks who have already shown us they don;t care and only want more money for there own agenda..

Anonymous said...

OH goody more cash for the biggest banks to hoard. People that need loans the most probably won't qualify due to bad credit ratings.

Let the bank consolidation, nationalization process continue.
Any guesses how many banks fail the so called stress test and be bought up for pennies on the dollar?

nancy bas mo 3agram said...

If what President Obama says is true, none of this money is going to be wasted. These are billions of dollars that are well needed for our country. If the government says they are going to make sure its not wasted and sent to the wrong people, we all should be trustful of the governmet. Although, we should be able to keep track of each penny.

Anonymous said...

Interesting. I've been thinking of going from renting to owning, but figure things are very tight. Maybe I will look into this.

Anonymous said...

I think people have become weary of all the promises that have been made. This is possibly the time for people to be shouting "show us da moneyyyyyyyy".
I do wish Governments would stop with this acronymitus!!!

PS. Do I sense a note of humour here Gary? Say it's not so!!