Fed Takes Boldest Action Since the Depression to Rescue U.S. Mortgage Industry
March 13th, 2008Via: Telegraph:
The US Federal Reserve has taken the boldest action since the 1930s, accepting $200bn of housing debt as collateral to prevent an implosion of the mortgage finance industry and head off a full-blown economic crisis.
The Bank of England, the key European central banks, and the Bank of Canada all joined in a co-ordinated move with a mix of policies to halt the dowward spiral in the credit markets, expanding on the “shock and awe” tactics used late last year.
The Fed’s dramatic step came after an emergency conference call by governors on Monday night. It followed the melt-down of the US chartered agencies — Fannie Mae, Freddie Mac, and other lenders — which together guarantee 60pc of the entire US home loan market. Fannie Mae’s share price fell 19pc in panic trading on Monday after Barron’s magazine said it may need a rescue package.
“The agency crisis was a Tsunami event,” said Tim Bond, global strategist at Barclays Capital.
“The market was starting to question the solvency of bodies that stand at the top of the credit pile. These agencies together wrap or insure $6 trillion of mortgages. They cannot be allowed to fail because it would cause a financial disaster. The fact that this sector has blown up has caught everybody’s attention in Washington,” he said.
And it appears not to have worked very well.
http://money.cnn.com/2008/03/13/markets/stockswatch_ny/index.htm?cnn=yes
Not that anyone who knows WTF is going on thought it would.
Wow.
I am supposed to be impressed or what?
Like the U.S. Mortgage Industry is a worthwhile “cause” to save!
How BRAVE and KNIGHTLY – saving the U.S. mortgage industry.
Uh. I say pull the plug on this patient of yours Ben.
Let it go already.
No amount of CPR or ventilation is going to give it life again.
The mortage industry body is corrupted and full of an incurable disease.
Pull the plug.
And if it lives after you pull the plug, well then, it might be something worth saving.
But pull the plug.