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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Elroy Jetson who wrote (394440)9/16/2009 4:38:04 PM
From: Real Man   of 436258
 
That is an understatement -g-

I call this purchasing "crap". The Fed guarantees the GSEs, the
GSEs guarantee all mortgages. So, the Fed essentially is
monetizing 1.45 Trillion worth of crap, 1.8 times monetary
base prior to crisis, plus some 300 billion of treasuries,
an additional 38%. Which is why... banks are rallying.
The GSEs ARE now part of the government, in spite of the
fact that their stocks are trading. So is AIG, on Fed's
life support, which pays for CDS crap. -g- By the way,
as soon as they started doing that, the banking crisis
passed.

"As previously announced, to provide support to mortgage lending
and housing markets and to improve overall conditions in private
credit markets, the Federal Reserve will purchase a total of up
to $1.25 trillion of agency mortgage-backed securities and up to
$200 billion of agency debt by the end of the year."

federalreserve.gov
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