Thursday, July 16, 2009

First CMBS TALF operation is a drop in the bucket

Following up on our post CMBS, the latest evidence of pain, the results are out for the first TALF CMBS operation. The NY FED agreed to lend $669 million against legacy CMBS paper as collateral. This may seem like a large number, but it will have no impact on the overall market.

Note that the first non-CMBS TALF operation took in almost $5 billion for auto and credit card collateral, and that was considered a failure of the program.

TALF is the last hope to get some stability into the commercial real estate mortgage market, but at this slow pace the program will be ineffective.

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