Great.
http://www.bloomberg.com/apps/news?pid=20601103&sid=aHr1QGvgv1kg&refer=us
Fannie Mae and Freddie Mac agreed to expand their purchases of U.S. mortgages and related securities after the Bush administration reduced the amount of capital the companies are required to hold as a cushion against losses.
How far are we going to leverage this country to try to get back to rapid economic growth that was barely sustainable in the first place?
<-- going long in foreign currency
<—Long.
:bsflag:
it’s not the worst idea for bush to do this as long as we are a little stricter on loan qualification.
I wish I knew enough about finance and economics to have an opinion on this. 
Probably do some reading of other people’s opinions tonight.
this one’s simple… all that happened is that the loan company is now required to hold less in their reserves which allows them to give more loans with what they have.
this should help home sales and the economy in general assuming we don’t have another loan defaulting crisis like the recent one.
When does that ever keep anyone from expressing an opinion ever?
Bush is an idiot. We should just close our borders and go into 100 years of self sufficiency, then re-emerge as the new dominant world power again!
There, see how easy that was?
i like the idea. He hasnt been THAAAT retarded lately. making some decent decisions.
Ok, did some reading.
The reserves are set by some really complex formula that figures out how many dollars they have to keep in reserve for how many dollars they have in loans. Several years ago they go in trouble with some CEO salary scandal stuff and the government came in and said, “we don’t like the result of the formula, we’re going to make you keep 130% of that number in reserve in case we find more fraud”. All they’ve done today is moved that down to 120%, so anyone who thinks this is going to let them give out more loans than they can afford is full of it.
This will free up 200 billion dollars. Banks will sell 200 billion dollars of their good mortgages to freddie/fannie which will free up 200 billion to loan out to people with good credit looking to buy a home in this buyers market. There are reports right now of people with great credit being turned down simply because the bank don’t have the money to lend. This should help with that.
And unlike rate cuts this shouldn’t hurt the dollar.
All in all, big :tup: from me.
What grade paper are they buying w/ this $200B?
Thats a very good question
.
giving anything to a bank can be considered a bailout… however the intent and goal here is to sell more houses and boost the economy – not to give banks more profits.
STEPS THAT WILL FEED THE ROOT PROBLEM, NOT FIX THE ECONOMY. lc
and, what He / Said.
The intent is to reduce the risk of major financial institutions collapsing. Since apparently a publicly traded company is buying this paper, I’m sure it’s good paper so I doubt there will be much of a relief on the banks in trouble.
Hopefully this reduces the amount of retards I have to talk to on a daily basis
They get LOLMAD because they didnt pay there house for 6 months, and we’re taking an extra week to review them for a loan modification :hang:
