Thursday, August 13, 2009

"Agency Debt," Part 2

In the continuing mystery of "agency debt," for which the Fed intends to spend $200B (around $1500 T*Bux) as a part of its quantitative easing program—"agency" we think means the GSE's—but "debt" remains ill-defined other than it probably does not mean mortgage-backed securities since there is a separate $1.25T program for that.

On his blog, Mish showed a robust market for corporate debt over the past month which he attributed to fueling the S&P index.

If this is where the $200B is earmarked—toward buying, insuring, or somehow facilitating corporate debt—we have an explanation for the sustained comeback of U.S. stock indices in the setting of an otherwise deteriorating economy.

But I don't know of any GSE that invests in major corporations so, again, the term "agency" continues to remain non-specific.


Anonymous said...

I used ”Credit Solution” to settle my debt and avoid bankruptcy. They managed to reduce my debt up to 58% and improve my credit score. It's legitimate . I came across this company on NBC News Special Edition. Check it out here:

SF Mechanist said...

Hi, welcome to my blog. Please, feel free to advertise away! Just thought I'd mention, though, that's quite the name you got if all blogger names are unique.