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  #1  
Old 09-24-2009, 10:25 AM
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Mike Kennedy Mike Kennedy is offline
 
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Exclamation FED prepares to end GSE $1.25 Trillion loan purchase plan-possibly early!

"After its two-day meeting, the Federal Open Market Committee said a program to purchase $1.25 trillion worth of mortgage-backed securities issued by firms like Fannie Mae and Freddie Mac will be allowed to expire by the end of March 2010. The move follows the committee's action at its previous meeting to wrap up a program to buy $300 billion in Treasury bonds by the end of October.

The decision was unanimous, continuing a period of unanimity on the committee that dates to March. There had been speculation that one or more presidents of regional Fed banks might dissent, as some have expressed greater eagerness than Bernanke to unwind the Fed's unconventional programs, perhaps even ending the purchases of mortgage-backed securities before the full $1.25 trillion is deployed. "

http://www.washingtonpost.com/wp-dyn...src=newsletter
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Old 09-24-2009, 07:10 PM
Randolph Kinney Randolph Kinney is offline
 
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As soon as the federal reserve's presence begins to fade, the mortgage interest rates will begin to rise as the appetite by real investors for GSE bonds over US Treasuries will fade with it. At some higher interest rate, more investors will appear. However, sovereign funds won't be the buyer at any interest rate because of the dollar over exposure. It would have to be domestic investors or international hedge funds that hedge against currency.
  #3  
Old 09-24-2009, 07:37 PM
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I can't see the market for MBS's growing without the Fed. People/investors have been burnt and with the amc mbs's floating around, someones going to review them and see they're all crap. Investors will demand higher quality appraisals but by then rates could be 7% or more and the $1.25 trillion in MBS's - well, what are they going to do with them when they find out they're worthless to investors? Another bubble set to burst? If Japan and China stop buying treasuries, we're screwed. Anybody think they'll buy the dross (skippy appraisals) the big banks are foisting as rigorously and stringently monitored? I'm glad they're ending this spending spree for the banks. Stronger dollar maybe, inflation probable. JMO.
BTW - Good post Randolph

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Last edited by fifteen : 09-24-2009 at 07:44 PM.
  #4  
Old 09-24-2009, 07:56 PM
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This Fed has caused as many problems as it has solved. Only with rising interest rates will this crisis come to a close. Keeping money artifically cheap has worsened the crisis not helped it ... Volker knew what needed to be done in the late 70s and early 80s and he did it ... this Fed has no backbone and the crisis may get worse before it gets better.

Higher interest rates and severe inflation are on the horizon.
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  #5  
Old 09-24-2009, 08:07 PM
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Originally Posted by PropertyEconomics View Post
This Fed has caused as many problems as it has solved. Only with rising interest rates will this crisis come to a close. Keeping money artifically cheap has worsened the crisis not helped it ... Volker knew what needed to be done in the late 70s and early 80s and he did it ... this Fed has no backbone and the crisis may get worse before it gets better.

Higher interest rates and severe inflation are on the horizon.
I think they need to get here soon. We need to get over it and move on.
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  #6  
Old 09-24-2009, 08:13 PM
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Onward downward and then upward..............hopefully
  #7  
Old 09-24-2009, 08:16 PM
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Onward downward and then upward..............hopefully
Like my mother used to say, "You better finish that plate or I swear......." but in spanish. It was always easier to wash clean plates, she never liked left overs.

I hope some of you get it.
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  #8  
Old 09-24-2009, 08:20 PM
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Like my mother used to say, "You better finish that plate or I swear......." but in spanish. It was always easier to wash clean plates, she never liked left overs.

I hope some of you get it.

When my disposal broke I just bought a dog.
  #9  
Old 09-24-2009, 11:57 PM
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I smell inflation in the air too. I'm just not too sure how to navigate it yet. I'm too young at 39 to have first hand experience of what kind of storm is brewing.
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  #10  
Old 09-27-2009, 08:47 PM
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Sierra Dale Sierra Dale is offline
 
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I attended an AI lunch that featured an economic speaker with international exposure. He said to watch the way Japan went as they had a similiar meltdown in the housing and lending market 12? years ago. He said that the market still has not recovered in Japan and that we were doing similiar plans for recovery. I did not finish my lunch.
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