TALF = Elimination of Risk = Higher Asset Prices = Bullish for Stocks
Though the markets finally sucumbed to a nasty sell-off the other day, the announcement by the Fed that the TALF will continue thru June of next year implies that financial markets, despite occassional bouts of false panic, will remain buouyant for quite awhile longer.

In fact, there is no doubt in my mind that some elements of TALF, or any other clever acronym the Treasury creates,  will continue indefinately as key components of our financial system. This in turn will lend ongoing support to the stock market, irregardless of valuation metrics.

The TALF is but one of the many programs the Fed is using to eliminate any degree of financial risk and accountability from large financial institutions. This removal of risk, as explained in the past, renders the notion of valuation meaningless and implies an almost infinite upper limit for asset prices. As noted, without risk, any price is a fair price and capitalism ceases to function.

And Now for Some Political Commentary…TALF over Healthcare?
Coming in midst of a heated national debate over healthcare, the TALF announcement, must induce a political response. I for one, find it ironic that for one our most important necessities of life, namely our health, the government seems dumbfounded on how to come up with a measly sum of $1 trillion over a decade. At the same time, however, for the support of the completely useless securitization markets the Fed is able to magically create $1 trillion in a matter of months! This is of courses lends continued support to my thesis that the financial crisis mainly reflects a moral bankruptcy of our country, rather than any true diminution of our economic capital.

TALF is Ultimately Worthless Because Complex Securitization Markets Are Not Needed for Economic Well-Being

In case one thinks securitization markets are by any means necessary for economic growth, I would call your attention to emerging markets, like China and Brazil, where the type of securitizations the TALF supports are non-existent. One can only marvel at the ability of these countries to sustain economic growth without sophisticated securitization markets. More importantly, one wonders how it was possible for the US to sustain strong economic growth for over a century, before the securitization gurus came on the scene.

The plain truth is that complex securitization markets are absolutely unnecessary for economic growth. They only exist as a foundation for casino capitalism, and are of no help to developing sustainable economic growth. The TALF as the savior for securitizations, is as such a useless economic program, that merely serves to strengthen the current economic policy of socialism for the rich, i.e. the banks, and capitalism for the poor.