Mosler proposal for the housing agencies

Have the Fed Financing Bank fund the agencies with fixed rate amortizing term funding. Have the FFB eat the convexity and allow prepayments of advances at par as mtgs pay down. Have Congress set the FFB’s advance rate for the mtgs for public purpose. Have fed member banks originate agency mtgs on Congressionally dictated terms […]

FNMA tightens lending requirements

[Skip to the end] That nagging feeling that 0 rates are deflationary keeps lingering. The following FNMA news might be even more deflationary than the Dubai news over time. I wonder if Congress was involved in this decision, as FNMA is a public/private partnership: Fannie Mae to Tighten Lending Standards: Report Oct. 25 (Reuters) —Fannie […]

renting foreclosed houses to former owners

[Skip to the end] I proposed this when the crisis first hit. Too late for millions of people in thousands of neighborhoods: “Fannie Mae, the country’s largest mortgage holder, announced today that it is adopting a version of a “right to rent” policy under which foreclosed homeowners will be allowed to stay in their home […]

Fannie not looking to maximize returns, CEO says

[Skip to the end] Wonder what Congress thinks of the CEO’s attitude toward ‘taxpayer money?’ Send this to your Congressmen, thanks! Fannie’s portfolio may grow $100B over next year, CEO says Fannie not going to look to maximize returns, CEO says: FMNU Fannie buying, guaranteeing $40B of new loans a month [top]

Bloomberg: Thoughts on Treasury plan

[Skip to the end] My take is an RTC type solution only works when the government owns the institutions, so this will probably be different. I suspect it will be more like Japan, where the government bought a new class of preferred stock in the banks to add capital. Whatever they will do will cause […]

Bloomberg: Stern Says Fed Rate Rise `Can’t Wait’ for Markets to Stabilize

[Skip to the end] A minority view but a growing one. They are thinking the low rates are destabilizing the housing and financial markets via the weak USD channel. Stern Says Fed Rate Rise `Can’t Wait’ for Markets to Stabilize by Vivien Lou Chen (Bloomberg) Federal Reserve Bank of Minneapolis President Gary Stern said the […]