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Originally Posted by Bugs $29 billion CREDIT LINE |
Wrong I'm afraid- they've baffled you with double speak.
It cannot be described as a credit line, because it is Non Recourse.
That means when the securities default/fail to pay interest (which they most likely will) there is no recourse to either Bear stearns or Morgan. The taxpayer carries the can.
If the Fed sells them back into the market at a Loss (they are not even saleable, but if they ever are their secondary market value will be a fraction of their face value, as priced by the Fed), you guessed it, the taxpayer carries the can.
Some Loan.
