By Nick Porcell
It is complicated. It is untested. And at $200 billion, the government's latest attempt to shore up the crumbling economy is anything but cheap.
The announcement yesterday that the Federal Reserve would generate up to $1 trillion in consumer loans by creating a $200 billion fund to buy asset-backed securities was met with an increasingly common reaction these days: caution and skepticism.
In theory, the Term Asset-Backed Securities Loan Facility (TALF) would persuade banks and other lenders to give new loans to consumers, businesses, homeowners, commercial real estate investors - you name it.
How? The government would take existing loans off lenders' books by buying them up as packaged securities. Lenders then would feel more comfortable issuing new loans.
And since loans help people buy things, the hope is it would contribute to an economic recovery.
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