CONGRATS...TOMORROW WILL BE A 100% DAY !!!! TOLD YOU TO KEEP ADDING!
Fannie and Freddie Pumped Up By Fed
Miriam Marcus, 12.30.08, 06:50 PM EST
The central bank will buy $500 billion in mortgage-backed securities beginning in January, as part of a program announced in November.
The U.S. Federal Reserve is taking another step toward breaking the logjam in the financial markets.
Late Tuesday, the Fed announced its plan to buy $500.0 billion in mortgage-backed securities by the end of June as part of a previously announced program. The Fed will launch the program to buy securities issued by mortgage agencies Fannie Mae (nyse: FNM - news - people ), Freddie Mac (nyse: FRE - news - people ) and Ginnie Mae, beginning in early January, “to support the mortgage and housing markets and to foster improved conditions in financial markets more generally,” it said.
Article Controls
imageemail
imageprint
imagereprint
imagenewsletter
imagecomments
imageshare
imagedel.icio.us
imageDigg It!
imageyahoo
imageFacebook
imagerss
Yahoo! Buzz
On Nov. 25, the Fed had announced a $600.0 billion program to purchase mortgage-backed and unsecured debt issued by Fannie Mae and Freddie Mac, which in 2008 together owned or guaranteed half the $12.0 trillion U.S. housing market as the largest providers of funding for U.S. home mortgages. The Fed program addresses the persistent problem of rising debt costs for Fannie and Freddie since September, when the government forced them to shrink, take on new senior management and ultimately scale back the degree of dominance they once enjoyed. (See "After The Bailout" and "Fannie And Freddie: What Next?")
On Dec. 18, Dallas Federal Reserve Bank President Richard Fisher said the Fed could “expand purchases of mortgage-backed securities, should we feel such purchases would be productive,” adding that “we believe that emphasizing the asset side of the balance sheet will do more to improve the functioning of credit markets and restore the flow of finance to the private sector.”
The agency MBS buying program is part of a sustained government effort to help the United States withstand a severe credit crunch and a deep housing downturn, which have tipped the economy into recession and have hurt economic activity around the world.
As part of the program announced in November, the Fed also said it would buy up to $100.0 billion in debt issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks.
The Fed selected BlackRock (nyse: BLK - news - people ), Goldman Sachs (nyse: GS - news - people ) Asset Management, PIMCO and Wellington Management as investment managers for the program.
