tossing money as he tries to distract the media
Posted on 09/13/2012 11:01:38 AM PDT by Free ThinkerNY
The Federal Reserve fulfilled expectations of more stimulus for the faltering economy, taking aim now at driving down mortgage rates.
The Fed said it will buy $40 billion of mortgages per month in an attempt to foster a nascent recovery in the real estate market. The purchases will be open-ended, meaning that they will continue until the Fed is satisfied that economic conditions, primarily in unemployment, improve.
There's strong hints that they'll do Treasurys next," Joe LaVorgna, chief economist at Deutsche Bank Advisors, said in a phone interview from London."They're pulling out all the stops to try to get this economy to gain some traction and, most important, to get unemployment down."
Enacting the third leg of quantitative easing will take the Fed's money creation past the $3 trillion level since it began the process in 2008.
"The Committee is concerned that, without further policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions," the Open Market Committee said in a statement.
(Excerpt) Read more at finance.yahoo.com ...
Ok, so we FINALLY just outright buy the houses for these people that should have never been given a loan in the first place. Except we took the long way around and NO ONE has any jobs! Thanks BARNEY!
I think in this case a lot them weren't sending in their mortgage payments.
You post works for 30 second soundbites on the political trail for Romney/Ryan and their surrogates.
Contemplate that the $480B is going to free up large amounts of tier 3 reserves for banks, for what ever portion of the mortgage portfolios are bought from banks and not from Fannie/Freddie/Ginnie.
In the end though, we’re shifting chairs on the deck of the Titanic, taking FedGov backed mortgage portfolios off the Fannie/Freddie/Ginnie balance sheet and putting the same portfolios on the FedGov backed Federal Reserve balance sheet is just more of the privatising the upside and shifting the downside to the public treasury.
Well it’s one two three, what are we fighting for...
New Scheme:
Bank originates a mortgage, bank packages mortgage, banks sell conforming mortgage portfolios to Fannie/Freddie, banks sell non-conforming mortgage portfolios to Federal Reserve, Fannie/Freddie sell mortgage portfolios to Federal Reserve.
Besides adding another top layer of complexity, this isn’t going to do much to increase velocity or quantity of money.
Reagan years too. I bought my first house in 1987 with a 30yr mtg at 10%.
LOL. They wish! I ain't got it.
The only thing I can think is that they print it or simply declare that they have "reserves" whether they do or not.
Do they tell the Treasury to print? Is that the way this works?
The money isn’t coming from us... they’re creating it out of thin air (devaluing our savings in the process).
I’m in a special situation with an ARM that can adjust up to 7%, which is still lower than I bought my first house at in the 90’s.
Do they print more money? Do they simply declare that they have it?
This is the FedPAC’s contribution to the Obama campaign. It makes no economic or constitutinal sense for the federal government to be a mortgage broker.
It’s “declared” in a computer.
The coinage and physical paper money only make up either 10% or 30% of the total “money supply”, IIRC.
Bernanke is a criminal. Romney has promised to fire him. He should repeat that promise and say he also supports the House bill to audit the Fed and demand the Senate pass it ASAP.
The newsies report this as if the money is fairly distributed across the country. You’ve got it right. It will go to the politically powerful. It will benefit the few at the expense of the many.
Mortgage buy-up of debt held by Friends of Obama? FOOs
Careful.
Not all homeowners will benefit. Only the deadbeat ones.
Promises to continue unsound monetary/bailout policies until those same policies makes everything better. What could go wrong?
———30 year fixed mortgage is at 3.25% - how much lower do they want it ?————
we just closed on a 2.875/15 yr last week.....who would have though there might be the opportunity to refi below that!!!!!!!!!
“”””Have a friend making on offer on a repo right now,she got a 30 year fixed at 2.5%.”””””
have not seen those rates....would have to see to believe unless there is some minority/first time buyers special rates available....
So how are they going to come up with $40 BILLION a month to buy mortgages? Easy, they will simply print it!
Let’s not forget that when you have more of anything, that thing is worth less.
” Promises to continue unsound monetary/bailout policies until those same policies makes everything better. What could go wrong? “
Short term expedient to get Obama over the hump.
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