The Fed's fast-tracking of TARP money as tier 1 capital - that is, the money valued at 100% of its face value, basically, for capital adequacy purposes - was finalized today. Not too surprising, not really that controversial: government money is good money. There's a tiny bit of a larger robbing Peter to pay Paul element to all this, though. What the Fed did means that TARP money - a state program - has been given to ensure that banks can meet their Fed/Basel regulatory requirements - which is also a state program. Some might call that going through the looking glass, but I call it more proof that we live under a big and complex government.
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1. Posted by Onlooker on May 22, 2009 @ 20:35 | Permalink
Part of what brought Enron down was the discovery that Enron was using its own stock to create net worth in SPEs and by extension in its own interests in those SPEs, and then carrying that net worth to its own balance sheet, thus indirectly using its own stock to create equity on its own balance sheet. Sound familiar?
2. Posted by Bruce Boyden on May 22, 2009 @ 21:47 | Permalink
Our government is large, it contains multitudes. Does it contradict itself? Very well then it contradicts itself.
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