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FBN's Elizabeth MacDonald on the Federal Reserve resurrecting its 2008 financial bailout plan and helping Greece out of its debt crisis.
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Will President Obama says he's optimistic that lawmakers will strike a deal to tackle the US debt crisis meanwhile the US is quietly continuing to bailout Europe.
-- the Federal Reserve Liz MacDonald joins us now at this.
IMF.
And European counter parties out there how we're doing but somehow the -- is also has its hand in this to the other.
Writes about -- Charles -- happening at the Federal Reserve has resurrected.
At 2008 bail out a rescue crisis program.
That it launch to help about European banks and effectively.
Gives and the short term dollars to central banks overseas in Europe.
I and in exchange the European those banks get -- the Federal Reserve -- euros this is money printing this is V money printing program.
At the Federal Reserve they -- do print money on both sides of the Atlantic so.
When it what is happening is thing they're saying they need to give these dollar swap lines -- short term dollar loans.
Because they're short is -- short term the liquidity crisis within the money markets and other lending.
You know -- -- lending sectors of the economy over there so.
The question is.
I can't tell you something I thought there was this was big systemic risk problem that the regulated supposed to catch.
And this has to do is why they're doing it because in the money market funds exposure to.
European Bank that's right so a trillion dollars.
I didn't that's our rates is that -- -- an incredible number entrusting -- -- IP -- -- of the reserve fund broke the buck after Lehman Brothers because we have been running that.
I think SEC put in place to -- that save you money find you can't have 10% you have to have rather 10% of your paper.
For your assets ink and paper.
Convertible into cash.
In one day you have to have about 30% convertible more 30% of -- -- your assets convertible into cash and sixty days.
So did they check that with these money funds they -- money plans to go running in barreling into these bad bonds.
Over there in Europe and now -- better served.
Launching yet again a very controversial dollar swap program that had congress Iran policy namely the partly why so we need to -- the -- Wow that's sad.
That's unbelievable.
You know I thought this is really largely not.
IMF and we're partially -- -- -- directly.
Involved in the bailout in Europe that -- you know apparently without her hands a lot more in this issue than we previously -- probably.
Will continue to be so we.
-- especially on this the bet -- the Fed's invisible hand right now that's practically Alcoa.
