Emergency Economic Stabilization Act

What does the timing of the mortgage lending and ABS market collapse have to do with the US government unveiling a package of new programs to boost liquidity and calm the markets? And why was this done just less than 30 days prior to releasing the Emergency Economic Stabilization Act
Friday, September 19, 2008
According to the then Federal Reserve Secretary Hank Paulson
“Wherever the government came in – – as with the guarantee program – – we risked causing massive distortions in the market.”
“The risk of a misstep was greater the faster we had to move. . . .The treasury was operating on the fly….!”
“At 8:30 am the Federal Reserve unveiled it asset Backed Commercial Paper Money Market Fund Liquidity Facility better known as AMLF. Under this program, the fed would extend no recourse loans to US depository institutions and bank holding companies to fiancé their purchase of high quality asset backed commercial paper from money market funds.”
“In a separate move to bolster liquidity, the Fed said it would but short term paper (debt) from Fannie Mae and Freddie Mac.”
The ABET has and continues to ask – “What does the timing of the mortgage lending and ABS market collapse have to do with the US government unveiling a package of new programs to boost liquidity and calm the markets?

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