Fed to launch MBS buying agency in January

[D-Mack]

Fed to launch MBS buying agency in January


WASHINGTON (Reuters) - The Federal Reserve confirmed on Tuesday it will begin buying mortgage-backed securities in early January with an aim of purchasing $500 billion dollars worth by the end of June under a program announced last month.

The Fed said it had selected investment managers BlackRock Inc (BLK.N), Goldman Sachs Asset Management (GS.N), PIMCO, and Wellington Management Co to implement the program, which will purchase mortgage backed securities (MBS) issued by issued by mortgage agencies Fannie Mae, Freddie Mac, and Ginnie Mae.

...

Only 500 billion ? Is there no fancy name for it ?

[don]

Re: Fed to launch MBS buying agency in January

On another Federal launch note:

“There is no known complete protection from the breakup event except to prevent its occurrence.”

That's NASA commenting today on the Columbia disaster but watch out for those same words to come out of the mouths of Federal gurus in the next administration as they play Hide the Salami. :eek:

[metalman]

Re: Fed to launch MBS buying agency in January

Fed to launch MBS buying agency in January


WASHINGTON (Reuters) - The Federal Reserve confirmed on Tuesday it will begin buying mortgage-backed securities in early January with an aim of purchasing $500 billion dollars worth by the end of June under a program announced last month.

The Fed said it had selected investment managers BlackRock Inc (BLK.N), Goldman Sachs Asset Management (GS.N), PIMCO, and Wellington Management Co to implement the program, which will purchase mortgage backed securities (MBS) issued by issued by mortgage agencies Fannie Mae, Freddie Mac, and Ginnie Mae.

...

Only 500 billion ? Is there no fancy name for it ?

how about...

Federal Usury Credit Transaction (FUCT)

or...

Bank Asset Rescue Facility (BARF)

[walenk]

Refi: Now, later, go to cash?

I fearlessly predict President Obama will have a proposal to make housing more affordable. Bet me.
The last time I looked mortgage rates were in the low 5%s.
Personally, this is a trade for me. But should I wait for the Obama-cornicopia, or grab the bird in the hand before poomsville? Another thread Fred?

[LargoWinch]

Re: Fed to launch MBS buying agency in January

how about...

Federal Usury Credit Transaction (FUCT)

or...

Bank Asset Rescue Facility (BARF)

or what about;

Association of Securities Servicing (ASS)

(great ones btw; did put a smile on my face)

[jtabeb]

Re: Fed to launch MBS buying agency in January

or what about;

Association of Securities Servicing (ASS)

(great ones btw; did put a smile on my face)

Did you catch mine from a while back:

Republic of the United Socialist States of American (RUSSA):rolleyes:

[Sharky]

Re: Fed to launch MBS buying agency in January

The Fed said it had selected investment managers BlackRock Inc (BLK.N), Goldman Sachs Asset Management (GS.N), PIMCO, and Wellington Management Co to implement the program...

BlackRock? Are they related to BlackWater? ;)

And of course Paulson's buddies at Goldman would have to get a piece of the pie...

What I'm wondering is what will happen to the mortgage-backed securities (and the associated properties) after the Fed buys them. Seems unlikely that they would hold them and try to administer the mortgages. OTOH, if they sell, would that start to set a market price on the paper (very bad for the banks)? It somehow smells like another sweet deal in there for someone.

[kingcopper]

Re: Fed to launch MBS buying agency in January

BlackRock? Are they related to BlackWater? ;)

And of course Paulson's buddies at Goldman would have to get a piece of the pie...

What I'm wondering is what will happen to the mortgage-backed securities (and the associated properties) after the Fed buys them. Seems unlikely that they would hold them and try to administer the mortgages. OTOH, if they sell, would that start to set a market price on the paper (very bad for the banks)? It somehow smells like another sweet deal in there for someone.

UH, YEAH, there buddies with Paulson! They are going to take all of the performing assets out of the bundles and create new bundles of performing assets:

100% performing: They'll keep for themselves
90% performing: They'll sell to desparate victims of themselves & Bernie
80%-60% performing: They'll market to unsuspecting SWF & Investors
60%-20% performing: They'll try and rework through a new corporation
20%-0% performing: PROPERTY OF THE U.S. GOVERNMENT!

Most of the mortgages inside of these bundles will be nonperforming and will end up back on the heels of the U.S. taxpayer. WE LOSE!

[LargoWinch]

Re: Fed to launch MBS buying agency in January

Did you catch mine from a while back:

Republic of the United Socialist States of American (RUSSA):rolleyes:

Missed it, but writing it down now!

Why American and not America? Is this some kind of coded message?

[Stretch002]

Re: Fed to launch MBS buying agency in January

Does anyone have some insight into what this might mean for the housing market? It seems to me this will lower mortgage rates in the short term. It also opens the door for banks to start lending more and packaging the loans off to Fannie/Freddie who then sell to the Fed. Will this slow the housing price declines? Hard to imagine the housing bubble reigniting given the worsening jobs picture. May be a nice opportunity for me to buy a house with record low rates before "Poom" sets in. What do you think?


Disclosure: I sold my house in December 2006 and have been renting ever since. I WANT to buy a house sometime either 2009 or 2010. Southern California market....

[Spartacus]

Re: Fed to launch MBS buying agency in January

efficient Federal derivatives upgrade program (eFDUP)

Wankers' Mortgage Dump (WMD)

how about...

Federal Usury Credit Transaction (FUCT)

or...

Bank Asset Rescue Facility (BARF)

[LargoWinch]

Re: Fed to launch MBS buying agency in January

May be a nice opportunity for me to buy a house with record low rates before "Poom" sets in. What do you think?


Disclosure: I sold my house in December 2006 and have been renting ever since. I WANT to buy a house sometime either 2009 or 2010. Southern California market....

I would not count on it. Furthemore, the bottom is much later than 2009 in my book: look at Japan.

Also, the MBS money is peanuts, but more importantly people are broke, have no credit, losing jobs, cats and dogs ... anyway get my vibe?

You made a great move in 06 it would be a shame to waste it; stay away.

[ASH]

Re: Fed to launch MBS buying agency in January

Most of the mortgages inside of these bundles will be nonperforming and will end up back on the heels of the U.S. taxpayer. WE LOSE!

In this case, the loser is any and all holders of US dollars. This particular $500 billion is to be created directly by monetization of the MBS, rather than paid for by borrowing/taxation.

Plan C

Ben Bernanke, the chairman of the Fed, has repeatedly promised to use “all of the powers at our disposal” to get credit flowing again. This week’s initiatives are another demonstration of what he means. The Fed and the Treasury agreed to guarantee $306 billion-worth of assets belonging to Citigroup (see article). They then created a $200 billion facility to purchase asset-backed securities. Most radically, the Fed promised to buy up to $500 billion-worth of mortgage-backed securities (MBSs) guaranteed by government-sponsored enterprises (GSEs), including the now nationalised mortgage agencies, Fannie Mae and Freddie Mac, and up to $100 billion-worth of their direct debt. The effect was immediate: yields on the securities plunged by 40 basis points, and the 30-year mortgage rate fell from a shade over 6% to 5.8%.

The MBS purchases are significant; for the first time they turn the Fed into a direct lender to consumers. Many homeowners, though they do not know it, will be sending their monthly mortgage payments to the Fed. The Fed will finance these programmes with newly created reserves: that is, it will print money. Its balance-sheet, which has ballooned from $900 billion to $2.2 trillion since August, could grow by another $800 billion, making it a larger lender than any commercial bank.

[Jay]

Re: Fed to launch MBS buying agency in January

how about...

Federal Usury Credit Transaction (FUCT)

or...

Bank Asset Rescue Facility (BARF)

Kredit Assistance Program Office, Offering Mortgages ;)

[LargoWinch]

Re: Fed to launch MBS buying agency in January

Kredit Assistance Program Office, Offering Mortgages ;)

Nicely done!