If the economy starts to recover in the next 12 months it will be due to the efforts of Ben Bernanke at the Federal Reserve not President Obama. Obama's stimulus plan won't really fully start kicking in until 15 months from now.
Ben Bernanke is working to repair the country's economy now. Bernanke's lastest effort is the Term Asset-Backed Loan Facility. This is an attempt to restart the debt securitzation market for credit cards, auto loans, student loans, etc. The chart above shows that this market has fallen from a $1 trillion market to a very small few billion. That's part of the reason there is not a lot of credit available.
A similar technique was used to restart the commercial paper market last fall. The technique worked very well. The commercial paper market was dead in the water threatening to shut down businesses because they couldn't get simple short term loans for daily operations. Bernanke got the Fed in the market and initiated the loans. The market rebooted and has been working smoothly since last fall. Now he is doing the same thing for the consumer market.
Way to go, Ben.
Ben Bernanke is working to repair the country's economy now. Bernanke's lastest effort is the Term Asset-Backed Loan Facility. This is an attempt to restart the debt securitzation market for credit cards, auto loans, student loans, etc. The chart above shows that this market has fallen from a $1 trillion market to a very small few billion. That's part of the reason there is not a lot of credit available.
A similar technique was used to restart the commercial paper market last fall. The technique worked very well. The commercial paper market was dead in the water threatening to shut down businesses because they couldn't get simple short term loans for daily operations. Bernanke got the Fed in the market and initiated the loans. The market rebooted and has been working smoothly since last fall. Now he is doing the same thing for the consumer market.
Way to go, Ben.
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