The Fed's Move...

Bernake and his cronies have announced a new lending facility that will lend treasuries to primary dealers in return for agency debt for 28 day periods (according to Bloomberg).  The interesting thing is that they will accept agency and non-agency AAA rated private-label residential mortgages as collateral.  What's interesting about this, is that back in the old days when I used to be a repo trader (90's), the fed never accepted anything other than treasuries or agency bullets as collateral in their repos.  This was because they could not price the securities.  So my question is, did the Fed suddenly get more sophisticated in its pricing abilities?  Or are they just willing to do anything to bail out the banks?  In any case, the market loves the news, futures are up sharply.  Given the rumors floating around yesterday about Bear Stearns going bankrupt, this is good news in the short term.  However, if defaults continue to increase in mortgages, the Fed is just delaying the inevitable outcome that banks will have to continue to write-down more assets as they go bad.