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Not to mention that the Fed made a "profit" on the liquidity injection. "Profit" because central bank doesn't really care about anything like profit, but the po
by YjSe2GMQ 7y ago
Not to mention that the Fed made a "profit" on the liquidity injection. "Profit" because central bank doesn't really care about anything like profit, but the point is everything was repaid.
That being said, there's a widespread belief called "Greenspan put" or "Fed put": https://www.daytrading.com/fed-put https://www.daytrading.com/fed-put
- ethbro 7y agoIt's hard to imagine central banks not making a profit on liquidity injection. As long as they have a semi-accurate pulse on real asset values, as a lender of last resort they have the sole ability to buy assets at distressed values. Nobody else has the ability to take a bath as the market implodes and simply create new capital to buy things at less-than-face-value. You'd only expect things to go really bad if the Fed mispredicted actual values.