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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Smiling Bob who wrote (108435)	3/7/2008 8:45:48 PM
From: Lazarus_Long	Respond to of 306849

This one? bloomberg.com Stand by for some real inflation. Or Bernanke's earlier idea to have bank swallow part of the home loans they made ('reduce the principal')? That has the same effect as doing nothing except that foreclosures stop. The reduction in principal would have to come out of equity and since banks have to maintain a given debt-to-equity ratio (FDIC Bank Holding Company Act), would reduce the amount a bank could loan or prevent any loans. Exactly what was to be avoided. (Those with fuller understanding of bank regulation are welcome to correct or expand on this as needed.) This is a beaut. bloomberg.com