The goal is to allow BIG investment firms essentially unlimited short-term loans secured by whatever toxic debt they have on their books.
CNBC reporter Diana Olick quoted Greg McBride,Bankrate.com:
It will not be measured today or tomorrow or next week. The success is going to be measured over many months. Right now there’s not an active market for a lot of securities; the root is in mortgages. What the Fed is doing is accepting a broader range of mortgage-backed securities as collateral in an effort to pump liquidity in the markets in the hopes that that helps ease the strains we’ve been experiencing for the past seven months.
It doesn’t really affect refis or loan modifications. It’s all about the spread between mortgage rates and treasury yields. It may provide a short-term psychological boost. . . .
All this 'Helicopter Ben' Rescue the Markets Hype was aimed at a short term psychological boost.
Nice job Ben ! We knew we could all count on you . . . < / snicker>
No they didn't.
What the Fed is doing is accepting a broader range of mortgage-backed securities as collateral in an effort to pump liquidity in the markets in the hopes that that helps ease the strains we’ve been experiencing for the past seven months.
OMG! That's terrible! Why is it terrible?
Excerpt:
Struggling to save their homes from foreclosure, more Americans are raiding their 401(k) retirement accounts to pay their bills — and getting slammed with taxes and penalties in the process, according to retirement plan administrators.Arrrgggh ! This is beyond stupid, stupid, stupid . . .Rather than borrow money from their 401(k) accounts, which would have to be paid back, a growing number of beleaguered families have been cashing out, plan administrators say.
This is happening even as borrowing from 401(k) accounts remains fairly flat. Fewer still are borrowing from 401(k) plans to buy homes. By contrast, new figures from plan administrators show the number of 401(k) "hardship withdrawals" is up in early 2008 compared with the same period last year.
The main reason? The need to stave off foreclosure or eviction.