Gentle signs of Japa-nic are beginning to show, don't you think? What with the Fed poking around and toying with things like buying up Treasuries (drives the yields down you know) and convincing the Euro folk that "cool kids lower rates." (New Zealand is very unpopular right now).
In another sign of its focus beyond conventional policy, Mr. Bernanke on Thursday called for aggressive new actions by the government to help homeowners avoid foreclosure. One approach, he said, could involve having the U.S. buy delinquent mortgages and refinance them.He called for revisions to a federal program called Hope for Homeowners that might encourage more participation. It is designed to help borrowers refinance with the help of the Federal Housing Administration.
Fed Weighs Its Options as Europe Cuts Rates [The Wall Street Journal]
Posted by guest , Dec 05, 2008 11:18AM
They don't get it, they simply don't get it. You could lower, and they probably will, borrowing costs to 0%, and it wont matter.
THE PRICES ARE TOO FRICKING HIGH!!
People are losing jobs, the stock market has decimated any savings, and these clowns are trying to force more debt down consumers' throats. Who is running this ship?!!
Who are the banks going to lend to? Which credit worthy individuals are left? Who has $12K-$30K laying around?
It's not the borrowing costs, it's LIQUIDITY!!!
The only thing that will prevent an all out deflationary depression is for the treasury to write checks of $40K to $60K (95% confidence interval of the average home in USA)for every tax paying American.
Crank the printing presses. Get out your wheelbarrels for bread.
Posted by guest , Dec 05, 2008 11:22AM
Japa-nic - nice.
Posted by guest , Dec 05, 2008 11:24AM
hey 1 take your ritalin
Posted by guest , Dec 05, 2008 11:29AM
Fed funds rate going to 0% Dec. 16.
Posted by guest , Dec 05, 2008 11:33AM
I disagree with 1. This is solvency issue that is masked as a liquidity problem. You are correct to be alarmed. Most individuals will never be able to pay back their loans and this will cause further strain on the banks or govt depending how the Fed and Treasury want to allocate the losses. You are also correct in stating that more borrowing is not going to help (at least for individuals).
Posted by guest , Dec 05, 2008 11:33AM
kamikaze ben writing his second thesis on GD II.
abusing bankers is the new abusing retarded people.
done here.
enjoy the weekend, all.
-retail brothers llc
Posted by guest , Dec 05, 2008 11:38AM
Sounds like a plan, move the debt from over leveraged individuals and move it to the federal government until it too is over leveraged and brings us all down.
Posted by guest , Dec 05, 2008 11:56AM
@ #1 - It's Wheel barrow - Turd!
Posted by guest , Dec 05, 2008 11:57AM
Bailing out the Chinese Overlords:
The New York Federal Reserve website reported that they will begin to purchase Asset Backed Securities (ABS) from failed mortgage giants Fannie Mae and Freddie Mac, as well as the Federal Home Loan Banks.
They also hinted that they will stop there - everything seems to be on the table now, officially. Treasuries and stocks may see direct effects, with outcomes mixed. Initially, the program will concentrate on non-callable, fixed-rate senior benchmark securities such as Mortgage Backed Securities (MBS), but there are indications in the language used that the program may expand to include other ABS such as privately issued MBS (non-GSE), bonds, stocks and other equities.
http://tinyurl.com/67wmz2
Posted by guest , Dec 05, 2008 11:57AM
@ #1 - It's Wheel barrow - Turd!
Posted by Anal_yst , Dec 05, 2008 12:10PM
wtf is the problem here? We need to deleverage, at every level. By definition, this means asset prices will decrease. This is inevitable, the longer we delay it the worse the pain is gonna be.
Posted by guest , Dec 05, 2008 1:41PM
#9 I am SOOOO fucking tired of your blogwhoring.
Dealbreaker is turning into Yahoo. Sadness.
Posted by cy , Dec 05, 2008 1:55PM
Hmmm...
Banks refuse to lend, creating a credit "crisis." I have an idea: let's continue to slash interest rates. Banks might not like lending now, but they'll definately want to lend when they receive less for making loans.
As politically unpopular as this may be, we need to RAISE interest rates (or better yet, let's let the markets determine interest rates instead of a couple guys who cannot possibly understand something as complex as a national economy)
When people want something that no one is willing to provide, you have a market failure. There is no such thing as a shortage so long as prices are allowed to adjust. Hence, the price of capital must adjust so that the lending market can clear.