TALF: The Long and Short of It

How the government plans to defrost lending.

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TARP, TALF: how do you make sense of this alphabet soup?

Here's the scoop on TALF (the Term Asset-Backed Securities Loan Facility), which the Fed released more details on today:

The goal is to get lenders lending again by loosening up money for consumer, auto, student, and small-business loans (TARP, in contrast, was created to bail out banks.) TALF aims to do this by encouraging big investors to buy up AAA-rated securities that are backed by assets like auto loans and student loans. In return, those investors will get up to $200 billion in low-interest loans. The intended result is to stir up enough investor confidence--and therefore lending--to eventually generate up $1 trillion in lending.

 Interested in more specific details? Here's the official statement.