Wikinvest Wire

Another $53 billion in MBSes for the Fed

Thursday, February 18, 2010

According to data released a short time ago, the Federal Reserve took down another big slug of mortgage backed securities over the last week - some $53 billion as indicated below - in what is supposed to be their second-to-last mid-month buying spree that has produced the regular stair-step pattern in the chart.
IMAGE When you look at the simplified version of the asset side of the Fed's balance sheet over the last 18 months, it becomes abundantly clear how the source of all that late-2008 credit market mess - souring mortgage debt - has now become the property of the central bank.

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2 comments:

Anonymous said...

Hey, they raised the discount rate to 0.75 percent. The Fed's cracking down.......

Anonymous said...

That MBS stuff is just the central bank taking care of the member banks that own it. The banks can keep on charging fees for issuing mortgages that no one in the private sector has any interest in, because no one trusts the banks any more.

Instead of cleaning up their act, the banks conned the taxpayers into guaranteeing the stuff. When that didn't work, the banks confiscated pensions via printing, and used the loot to buy the stuff.

Make the banks clean up their act already. Since this stuff will eventually have to be marketed overseas, the banks will have to adopt mortgage standards that the rest of the world has confidence in.

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