I think some rappers need to take a page out of the FEDs book. They are just throwing massive piles of money around and seeing what happens.
Rolling out powerful new weapons against the financial meltdown, the Bush administration and the Federal Reserve pledged $800 billion Tuesday to blast through blockades on credit cards, auto loans, mortgages and other borrowing. Total bailout commitments, loans and pledges of backing neared a staggering $7 trillion.
Yeah that is trillion with a T. They also seem to be diamonds out of the trash when it comes to loans they are plucking from the corpse of Fannie and Freddie.
As for Tuesday's actions, the mortgage-backed securities the Fed will buy will be investment-grade assets — not the toxic mortgage-related assets that the administration initially had said the $700 billion financial rescue program would buy.
By focusing on investment-grade securities, the Fed will be able to help provide a functioning secondary market. It will pay the prices for these securities that are being set by the market. Had the Fed needed to buy bad assets, it would have had to develop a mechanism to properly price assets that weren't being traded.
So they are able to nationalize the good loans and leave the bad stuff on the books of the GSEs. They are also making a market in these securities and setting the price as well. I guess the "Lender of Last Resort" has just become the "Mortgage Bank of Last Resort." Now they can slowly destroy the bad debt at the GSEs and take over these foreclosed homes if they want. Perhaps they can then sell the houses or use them to house low income families or something.
2 comments:
The housing market is going to experience a boom very soon due to the extra money going around. Most people don't realize how much money there is out there. During economic times like this, there is more money to be had than ever. Because of the bailouts and economy, lenders are bending over backwards to bail you out too. Believe it or not, there is people getting tons of cheap money nowdays to start businesses, buy homes, pay off debt, and more. Bailouts for Everyone
Nationalization isn't a bad thing, it means that the govt has control. It isn't all doom and gloom if you know where to look. Most people don't realize how much money there is out there. During economic times like this, there is more money to be had than ever. Because of the bailouts and economy, lenders are bending over backwards to bail you out too. Believe it or not, there is people getting tons of cheap money nowdays to start businesses, buy homes, pay off debt, and more.
The Bailout for You
Post a Comment