Unqualified Reservations Fri 2009-12-18 10:03 EST
Expiring liquidity facilities: bad plan, Stan
I predict: serious financial disturbances will occur on or before February 1, 2010. Or soon thereafter...I also have a serious - ie, verifiable - prediction. I predict that before the end of 2010, probably well before the end of 2010, possibly even before the beginning of 2010, the Fed will be forced to renew these facilities or others like them. In other words, I predict that its attempt to kick the liquidity junk will not succeed. In the end, I believe all these "temporary" facilities will become substantively permanent - just like the original LF, deposit insurance.
Bad plans; Expiring liquidity facilities; Stan; Unqualified Reservations.