The Fed Rides to the Rescue of JPMorgan and Citi Again

I’m getting sick of this. They can get away with it because few understand what is going on and there are so many distractions. From wealth transfer to wealth preservation for the few while the many fall back, again.


Quietly, on July 13, the New York Fed published a list of asset-backed loans that it had approved for eligibility in one of its emergency lending  programs, the Term Asset-Backed Securities Loan Facility, otherwise known as TALF.

The New York Fed stuck a smattering of small business loans and one student loan product on the list. Everything else was securitized pools of mortgages on commercial real estate, much of it issued by JPMorgan and Citigroup. TALF was supposed to help the consumer by keeping interest rates down on consumer loans. It’s pretty tough to find a connection between the consumer and commercial real estate mortgages on hotels, shopping malls and office buildings.

One thing notable about the New York Fed’s approved list is that the securitizations of these commercial mortgages by JPMorgan had occurred as far back as 2013 and in the case of Citigroup, as far back as 2015. Is it really the job of the Fed to bail out the banks from old deals that are now souring?

Please view the entire article here.

TSP Smart & Vanguard Smart Investor

Categories: Perspectives, The Smart Bird

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