[TomasUSMC]

12 months will be like 3 percent of GDP. DAMN.

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.

WELL SAID

[JerseyHighlander]

Found confirmation on my first take on this from JPMorgan:

Thursday, September 13, 2012

The Fed will buy over half of all new agency MBS

So much for shifting the US mortgage business into the private markets. Going forward the Fed will be a buyer of more than half of all new agency MBS issued. At this point one might as well make the GSEs part of the Fed or give the central bank a mortgage origination capability.

Source: JPMorgan	From http://soberlook.com/2012/09/the-fed-will-buy-over-half-of-all-new.html