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SPDR S&P 500 ETF Message Board

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  • texasbroker2000 texasbroker2000 Nov 5, 2010 1:42 PM Flag

    If Treasury and Fed work together,

    You're right it will work great for the banks...borrow from the window at 0 and buy Treasuries....shore up capital.

    I think that they're doing this because there is going to be a big write down on the real estate debt assets banks hold.

    The fed is getting ahead of the wave and giving them the ability to raise their required capital now.

    To think QE2 is going to spur lending is a misguided message.....I think it's a futile attempt to shore up banks capital reserves once they face the reality and start writing off the debt.

    Banks have been holding hoping for the real estate market to recover but that's not happening. With long rates in the 4s,% there should be more demand but there is not.

    It's really interesting that the market thinks QE2 is a good thing and not an indication that the economy is on the edge.

    If the economy is in recovery why is it necessary?

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