Dudley supporting housing?

[flow5]

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[flow5]

Re: Dudley supporting housing?

Think I made a mistake. Could just be because the Payments Systems Risk Policy ended intra-day credit for GSE's. When GSE's make large payments it's disrupting the level of reserves.

[Spartacus]

Re: Dudley supporting housing?

If they want to prevent a collapse then it will take more than a few lines in some reports that no one reads.

While I suspect Bernanke will try to bury FED house price support action in his comments, part and parcel of appearing to fight inflation, the action must show up in lots of big numbers all over the place.

The mortgage industry will have to re-hire and re-tool to get the new money out there.

IMHO, when it happens we will see it. Clearly.

There's been a change in the FOMC's temporary open market operations (repos): Dudley is shifting his focus to agency securities. Is he proping housing? http://www.newyorkfed.org/markets/om...?SHOWMORE=TRUE

U.S. Treasury and Agency Securities -- April 2004
The Handbook of Fixed Income Securities, seventh edition

http://www.newyorkfed.org/cfcbsweb/Treasuries_and_agencies.pdf
Agency securities are direct obligations of federal government agencies or governmentsponsored enterprises. Federal agencies are entities of the U.S. government, such as the Tennessee Valley Authority. Government-sponsored enterprises are publicly chartered but privately owned and operated entities, such as the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), the Federal Home Loan Banks, and the Farm Credit Banks. The agencies issue debt securities to finance activities supported by public policy, including home ownership, farming, and education.9 Agency securities are not typically backed by the full faith and credit of the U.S. government, as is the case with Treasury securities. Agency securities are therefore not considered to be risk-free instruments, but rather trade with some credit risk. Nevertheless, agency securities are considered to be of very high credit quality because of the strong fundamentals of their underlying businesses and because of the agencies’ government affiliation. Several of the agencies have authority to borrow directly from the Treasury. Additionally, there is a perception among some market participants that the government implicitly backs the agency issues and would be reluctant to let an agency default on its obligations.