Federal Reserve officials are starting to build a case for a new program of buying mortgage-backed securities to boost the ailing economy, though they appear unlikely to move swiftly. The idea would be to target any new efforts by the central bank at the parts of the economy that are most severely impeding a recoveryâthe housing and mortgage marketsâby working to push down mortgage rates. Lower mortgage rates, in turn, could encourage more home buying and mortgage-refinancing, and help the economy by freeing up cash for consumers to spend on other goods and services. http://online.wsj.com/article/SB10001424052970203752604576643510352250474.html
Good grief. This is getting crazy when the fed is looking at 4% mortgage rates and thinking "Man, that's just too damn high. We should drop it down some more." People reading about this 50 years from now will be thinking "WTF was wrong with these idiots?"
If current policy is tight (which pretty much every "respectable" economist says) I would hate to see what loose policy looks like. With all those economists they have on staff you'd think someone would realize the problem is not the level of rates anymore, (nor has it been for quite a while.) But I guess when all you have is a hammer...
I finally got a decent deal on a 3.75% refi and now im saying to myself. "should I hold off for the jubilee?". I got this nutty feeling that cominginto the election Obama will propose either debt relief or a nationwide refi under 2.00 for anybody with a mortage regardless of LTV, underwater, overwater...etc
It feels like Ben is fighting the last war. He's an expert in the period 1929 to 1940 but perhaps his focus should be on the period 1940 to today when the dollar became the main reserve currency dethroning the pound. We as americans will loose a lot more if the dollar losses its reserve status than if the house prices come down to where a regular joe can pay for one in one lifetime.
By the time the mayhem these policies unleash on main street Ben will be long gone and happily doing something else. May pop to do a short thing for 60 minutes. Just like his master, Greenspan, the chief architect of the great recession is off the radar after his years of 'sainthood' in the FED.
Between ES pushing recent highs, oil near $89 as of this moment, and food inflation still going up, the Fed is just huffing and puffing. No further easing coming from them until things get much worse. Even then, they're staring a hostile republican presidential candidate in the face (not one of the current runners likes Bernanke or what he's doing) for next year's election. It's too political, they won't do it.