Category Archives: federal reserve

The Fed Puts Out All Stops

The New York Times reports that the Federal Reserve will use unconventional measures to prop up the lending industry. You can get loans at low interest rates if you have superb credit, but most borrowers will have a hard time … Continue reading

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Fed Buys Mortgage-Backed Securities

Over the past 25 years, we’ve had an explosion of fancy debt securities, many of them backed by mortgages of varying qualities. New York’s branch of the Federal Reserve said this week it had started buying these things to boost … Continue reading

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Ben Bernanke Speaks At Housing Conference In Berkeley

Bernanke likes to say he’s an economist, not a politician. He outlines possibilities for the GSEs such as Fannie Mae and Freddie Mac. He surprises me with his support for government intervention. From the AP: He did say that private … Continue reading

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Ben Bernanke Wants More Government Intervention

Ben Bernanke suggests creating a government agency to insure mortgage bonds. He claims there would be a limited downside for the government and a significant upside for the market. He says this has worked well in Europe. Bernanke emphasizes that … Continue reading

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IndyMac As The Model For A Mortgage Turnaround

ABC News reports that the US Treasury is looking at a new proposal from the FDIC to insure mortgages. Lenders would modify loans and in exchange those loans would be insured. More: FDIC chairwoman Sheila Bair touted the benefits of … Continue reading

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Should Lenders Revise Troubled Mortgages?

The Federal Reserve cut its funds rate (the rate at which it lends to banks) to one percent yesterday. The stock market jumped 200 points today. Oil dropped to $65 a barrel. Good news. Should the FDIC insure mortgages? The … Continue reading

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What Will The Federal Reserve Do Next?

Business Week speculates. The Fed has other weapons aside from lowering the funds rate. Low rates caused this crisis. Can they get us out? Report: Instead of dropping rates to zero, the Fed probably will turn to other weapons to … Continue reading

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Economy Slows, Interest Rates Cut Again

This was a concerted move with other central banks around the globe. The dollar has plunged, stocks were down 70 points, and oil jumped $4 a barrel. Reducing the funds rate to zero is a weird possibility. The things government … Continue reading

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What Will Be The Consequence Of All This Cheap Money?

Countries around the world are inflating the money supply. They’re printing mad money. What will happen? Why are we subsidizing our car companies? From NPR: The Federal Reserve cut interest rates for the second time in three weeks, slashing its … Continue reading

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Building Up The Federal Housing Administration

Here are some options: The FDIC could guarantee home mortgages in exchange for banks giving lower interest rates and adjusting troubled loan deals. Servicers could be paid to change loan terms. Use Fannie Mae/Freddie Mac to reduce foreclosures. Michael Barr … Continue reading

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