We now have word that the Fed finally has actual mortgages on its books. This has been spoken of for awhile, and has been a major part of the bailout planning, but in practice there seems to be resistance by the Fed and Treasury Department to accepting mortgages on their balance sheets. Nobody wants toxic mortgages.
But here it is now; mortgages from Bear Stearns and AIG are carried by the Fed. How an investment bank and insurance company came to service home loans I have no idea, but there you go. As I've anticipated before, the government will be more generous than private industry when it comes to loan modification.
In other news, today was another Fed Open Market Committee meeting. They cut interest rates to zero last time, and so until they start raising rates again, there isn't much to report. Expect quantitative easing soon.
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"How an investment bank and insurance company came to service home loans I have no idea, but there you go."
-deregulation of the financial services industry, started under the Clinton Administration & accelerated under the Bush administration allowed that to happen. Everything was fine from 1945 to 1996 due to the spate of laws & regulations established after the Great Depression. Since 1996, the banks, investment banks, insurance companies, etc... have gotten too big, too powerful and involved in things they shouldn't have been allowed to be in. "Too big to fail" must no longer be accepted. The biggest banks need to be broken up just like the oil, pharmaceutical, telecommunications companies need to be broken up due to their cartel like behaviour.
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