Tag Archives: US Treasury

Agency take over

Posted on by


[Skip to the end]

Recap:

  1. If I’m reading it right, the agencies will fund directly through the Treasury. I’ve been suggesting this for many years. This lowers the cost of funds for housing, the point of the entire program, by removing a premium that’s been paid by the lack of an explicit guarantee.
  1. Agency portfolios being phased out, to be replaced by direct purchasing of the MBS (mortgage-backed securities) by the Treasury. This has no real implications for the non government sectors, just accounting on ‘their’ side of the ledger. But it does mean lending can continue and funds will be available for all eligible borrowers.
  1. Some kind of government preferred stock coming between profits and the remaining shareholders of various classes. This should leave stocks with some value depending on actual portfolio losses, unless I’m missing something.

 
I’d guess most markets have been pricing in worse outcomes than this.


[top]

Share

Reuters: Paulson on Mideast USD pegs

Posted on by


[Skip to the end]
Maybe the weak USD is causing him to have second thoughts on preventing CBs and monetary authorities from accumulating USDs to keep their currencies low and support their exporters?

Ending dollar peg won’t solve Gulf inflation: Paulson

by David Lawder

(Reuters) U.S. Treasury Secretary Henry Paulson said on Saturday the dollar peg for currencies in the Middle East had served those countries well and any changes to the peg would be a sovereign matter.

Paulson, on a visit to Saudi Arabia, Qatar and the United Arab Emirates, also told a news conference the current level of oil prices were a burden on economies and consumers around the world.

Asked about the dollar peg, Paulson said:

“That is a sovereign decision … The dollar peg, I think, has served this country (Saudi Arabia) and this region well.”

Paulson earlier met Saudi Finance Minister Ibrahim al-Assaf to discuss a range of issues including the oil market, the U.S. and Saudi economies and issues related to foreign exchange.


[top]

Share