This from Bloomberg:

“The Federal Reserve’s requests from borrowers for loans to buy asset-backed securities fell 64 percent from last month as investors balked at visa limits and possible political efforts to tax earnings.

The decline hinders Fed Chairman Ben S. Bernanke’s efforts to lower borrowing costs and extends a slow start for a program that the Obama administration is using as a cornerstone of plans to revive credit and end the recession. The Fed is struggling to lure investors, such as hedge funds, that are wary of government restrictions or the risk of future intervention.

“It is a big disappointment,” said Stephen Stanley, chief economist at RBS Securities Inc. in Greenwich, Connecticut. “There are some folks who have decided they just don’t want to play in any government programs.”

Personally, whatever their particular reasons, I am very grateful that major hedge funds are refusing to participate in the government’s fraudulent programs, like the TALF. Ultimately, the more funds hold back from participating in these frauds, the greater the chances the government will finally do the right thing and simply restructure the banks in a truthful and effective manner.