Bookkeeping: Closing Short on SL Green (SLG)

With the Federal Reserve indeed following through last week on the lobbyists months long push to include legacy commercial real estate debt into their TALF program[Feb 23, 2009: Fed May Need to Recast TALF on Commercial Real Estate] [Jan 13, 2009: Bailout Nation Continues in Commercial Real Estate Land - "Lemme In on that Money"] [Dec 22, 2008: Wall Street Journal - Property Developers Ask for Government Bailouts], the REITs are very happy campers. It took 6 long months but the central bank finally broke. You just have to love a country where lobbyists have access to the Fed, but the people cannot even audit it. Cronyism 101. I didn't bother posting it because we've been telegraphing this move for many months and as I wrote the blog entry that little piece of throw up starting shooting up my throat... remember the end game folks - the Federal Reserve is now a massive hedge fund and when your attention is elsewhere in 2011-2013 (enjoying a new bubble they create with easy money) they will suffer large losses from everything they are backstopping. Notice the "truth in labeling" - 'toxic' has been replaced with 'legacy'... but trust me, it all smells the same.

• May 19 (Reuters) - The U.S. Federal Reserve on Tuesday further widened its safety net for downtrodden credit markets by making older commercial property loans eligible for an emergency program.
• The move is the Fed's first attempt to use its unlimited lending capacity to try to support markets for "legacy securities," or those that were created months or years ago. Previously, the Fed program supported only new commercial real estate lending.
• If the Fed's efforts to start up commercial real estate lending works, it could begin to help an industry that many analysts believe is on the verge of massive losses. (because that's what the Fed is here to do, help very well off people not take losses - right there in their charter)
  
• Risk premiums on commercial mortgage-backed securities dropped after the announcement, according to Trepp, a bond data provider that tracks commercial mortgage backed securities. (everything is safe guys! We unloaded even more junk onto the US taxpayer! hip hip hooray!)