Troubled Asset `Belief` Program

This article was authored by Shahriar Shahida, CIO at Constellation Capital Management LLC, New York:

During the past three weeks since Congress passed TARP, the levered loan and high yield indices have fallen over 7%; the AAA tranche of the 2007 sub prime mortgage indices are down over 19%; and the SP 500 index is down over 22%.

The question that begs to be asked is why? Wasn’t TARP supposed to provide a huge boost to confidence and help stabilize all of these markets? If TARP was achieving its objectives, would investors across asset classes and the globe continue their indiscriminate selling?

Clearly, the markets do not believe that the largest banks and investment banks will use any of $250 billion newly infused TARP capital to extend new loans anytime soon.

Frankly, who can blame the bankers? Why would anyone in h......................

Source:
http://www.opalesque.com/AMB2008/48032Troubled_Asset_Program.html