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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: John Vosilla who wrote (20698)	1/7/2005 1:07:43 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Or perhaps like the 70's here? If yield curve across the whole spectrum was someday soon to be flat at near 4% and the true nonmanipulated (by the BLS) inflation rate was over 6% wouldn't that still be highly accomodative? Do you think housing and consumers could take hikes to 4%? I do not. Mish

To: John Vosilla who wrote (20698)	1/7/2005 1:10:10 PM
From: mishedlo	Respond to of 116555

PHILADELPHIA (Dow Jones)--Federal Reserve researchers have asserted in a new study that purchases of mortgage securities by housing giants Fannie Mae (FNM) and Freddie Mac (FRE) have a "negligible effect" in stabilizing mortgage rates, implying the purchases primarily benefit the firms themselves. Preliminary findings of the study, by Fed economists Wayne Passmore, Shane Sherlund and Andreas Lehnert, were presented Friday at an academic seminar on the sidelines of the annual meeting of the American Economics Association. They were immediately criticized by Paul Kupiec, an associate director at the Federal Deposit Insurance Corp. The Fed researchers and Kupiec said their views didn't necessarily represent the views of their institutions. The final version of the study will be published next week. Fannie and Freddie are government-sponsored enterprises that have been issuing debt at a rapid clip to buy mortgages, which they then bundle and sell to private investors. Both have been hit by big accounting scandals in the last few years. Fed Chairman Alan Greenspan has said their growth will "almost surely" create problems for financial markets if left unchecked.