After a tepid start, it looks like the TALF, the Fed's term asset-backed securities lending facility, is gaining traction. Fortune offers an article that makes it clear that lots of investors are being swayed by the more than favorable terms that the Fed is offering. One trader tells the magazine: "I've had accounts that dropped everything they were doing to take a look at this TALF financing. It was like nothing they had ever seen. It beats any financing that the private sector could ever come up with. I almost want to say it is irresponsible."

Indeed, you have to wonder: Are they too favorable to investors? Suppose hedge funds load up and buy lots of asset backed securities-including soon-to-come securities backed by commercial properties--but the market continues to tank. That's hardly inconceivable. Investors lose their equity but are not liable for the balance of the TALF loan. It would seem the Fed is really wagering here. 

For more:
- here's the Fortune article

Related Article:
Hedge funds can now borrow from the Fed