Posted by WARREN MOSLER on November 25th, 2008
Yes, the Fed is the agency that’s set up to buy financial assets, not the treasury as per the TARP.
They got that one wrong, this one right, in that respect.
Of course, no excuse not doing this a year ago- more evidence of a failure to grasp basic monetary operations.
> Just hitting the tapes!
> *FED TO LEND UP TO $200 BLN TO INVESTORS IN ABS :FNM US, FRE US
> *FED SETS UP TERM ASSET BACKED SECURITIES LOAN FACILITY :FNM US
> *FED TO BUY MBS THROUGH ASSET MANAGERS, STARTING BY YEAR-END
> *FED TO START BUYING GSE OBLIGATIONS NEXT WEEK :FNM US, FRE US
> *FED TO BUY DIRECT GSE OBLIGATIONS THROUGH PRIMARY DEALERS
> *FED PURCHASES OF GSE SECURITIES TO BE OVER `SEVERAL QUARTERS’
> *FED SAYS SPREADS ON GSE DEBT HAVE `WIDENED APPRECIABLY’
> *FED ACTION AIMED AT REDUCING COST OF CREDIT FOR BUYING HOMES
> *FED TO BUY UP TO $500 BLN OF FANNIE, FREDDIE, GINNIE MAE MBS
> *FED TO BUY UP TO $100 BLN OF `DIRECT OBLIGATIONS’ FROM GSES
> *FED TO BUY UP TO $600 BLN OF GSE DEBT, MORTGAGE SECURITIES