Fed Announces It Will Take Worthless Crap As Loan Collateral (As Long As You Are A Bank)

From the AP:

The New York Fed has announced modifications to its new Term Securities Lending Facility (TSFL). The TSFL auctions will now allow schedule 2 collateral, instead of the schedule 1 collateral previously proposed. Schedule 2 collateral will now include collaterized mortgage obligations (CMOs) and AAA rated commercial mortgage-backed securities

In other words, they will take any kind of worthless security the banks and security dealers want to pawn off on them.

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