We still don't have nearly enough information about the various aspects of the Geithner plan for anyone to offer an informed analysis. This isn't just obsessive lawyering on my part. Material terms relating to the financing, fund structure, asset eligibility, etc., are still unknown. For example, regarding the Legacy Securities program (i.e., TALF 2.0), the Treasury's fact sheet states:
Borrowers will need to meet eligibility criteria. Haircuts will be determined at a later date and will reflect the riskiness of the assets provided as collateral. Lending rates, minimum loan sizes, and loan durations have not been determined. These and other terms of the programs will be informed by discussions with market participants. However, the Federal Reserve is working to ensure that the duration of these loans takes into account the duration of the underlying assets.Does anyone honestly think it's possible to properly assess the Legacy Securities program without knowing these terms? I didn't think so. Most of the terms of the programs announced today haven't been finalized yet, and since a Treasury official told me earlier that they want to get these programs up and running by the end of April, all these terms have to be hammered out in negotiations between the Treasury, the banks, and the buy-side in a very short window of time.