Mortgage Meltdown: Fed $200 Billion Loan and Acceptance of CDO's as Capital

While there is an obvious combination of hypocrisy and deception in allowing financial institutions to use their CDO’s for collateral or capital reserves, this latest move from the Fed comes closest to addressing the real issues on the banking, money and liquidity issue. I’m no supporter of sweeping problems under the rug, but what we need most right now is breathing room, and if we all remember what is under the rug, we can clean it up later. It is an unfortunate compromise that doesn’t fix anything, but it partially stops the bleeding. Yet NOTHING will stop the downslide unless the foreclosures stop, the evictions are frozen and everyone who is renting or owning a home is given incentive to stay there. Just as the financial institutions are being relief from problem of their own making, so must the borrowers/buyers of homes in the bubble leading up to this mess.

Tags: capital, Federal reserve, money, reserves
Posted in bubble, Corruption, Eviction |