Friday, November 09, 2007

What? Did Bernanke Really Say This ?

The piece from the WSJ is for real.... I´ve heard him say this during yesterday lousy performance before Congress' Joint Economic Committee. I think after this even the single person left that still took Bernanke seriously has now some doubts. Even i wouldn´t have thought that he is morphing into Greenspan at almost warp speed..... Cramer will be proud....And some still wonder why the $ in tanking.....

Ich kann die Geschichte des WSJ bestätigen.... Ich habe dieses Zitat während des erbärmlichen Auftrittes von Bernanke vor dem Congress' Joint Economic Committee selber gehört. Ich denke das spätestens jetzt die wenigen die noch immer eine hohe Meinung von Bernanke haben jetzt doch langsam Zweifel bekommen. Und selbst ich hätte es für unmöglich gehalten das Bernanke sich in Lichtgeschwindigkeit in Greenspan verwandelt.... Und einige Fragen sich immer noch warum das Vertrauen in den $ im freien Fall ist....

Thanks to Cox & Forkum

Idea of Jumbo-Loan Guarantee Is Floated
WASHINGTON -- Federal Reserve Chairman Ben Bernanke yesterday floated a new idea to fix the troubled market for mortgages too large for Fannie Mae and Freddie Mac to buy: Allow the companies to securitize jumbo-size mortgages but have the federal government guarantee them

Fannie and Freddie currently can buy mortgages only up to $417,000, and Congress -- so far -- hasn't acted to lift that limit despite distress in that market that has made jumbo mortgages at "somewhat tighter terms and higher prices," as Mr. Bernanke put it.

As an alternative to lifting that $417,000 cap, Mr. Bernanke offered a surprise answer to questions on Capitol Hill. He suggested that Congress could consider allowing the companies, known as "government sponsored enterprises," buy mortgages of as much as $1 million from lenders, pay the government a fee for guaranteeing them and then turn them into securities to be sold to investors.

"That would be, I think, of some assistance to the mortgage market," the Fed chairman said. "From the federal government's point of view, it would be taking on some credit risk, which you may or may not be willing to do." He added, "It would be a good idea to make the GSEs ultimately responsible for some, any excess losses, or some part of excess losses, relative to the premiums that are paid."

Mr. Bernanke's idea is significant because it could potentially extend the government's support and exposure to the mortgage market.... For years, the Fed and the Bush Treasury have complained that investors believe the companies have an implicit government guarantee of their debt. Fannie Mae and Freddie Mac purchase loans on the secondary market and either package them into securities or hold them in their portfolios, which now total $1.4 trillion.

> I can smell fear.......

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Anonymous Anonymous said...

LOL, that just cracks me up! Bernanke doesn't want Japan deflation to happen here, so he will do anything to restart the housing lunacy including shoring up the inflated prices in the housing sector. Well, it happened in part because the Japanese wouldn't face up to the bad debt they had in the early 90's... just Ben is desiring now.

4:35 AM  
Blogger jmf said...

Moin Roidy,

"Idiot" sums it up .....

4:39 AM  
Anonymous traderboy said...


i don't even see why they need the GSE's anyway in a supposedly "free" market. what they should have done is REDUCED the role that they play whilst the housing boom was going would have slowed the market on the way up, and been at a time when the market could have handled a gradual takeover of the role the GSE's play.

5:23 AM  
Blogger jmf said...

Moin Traderboy,

"REDUCED the role"

That was his view and the view from Wall Street just 3-6 month ago....

But now with the financial system at risk all bets are off....

I hope that the foreigners are waking up and stop buying all the crap.....

I´ve never seen so many reason to own gold...

5:42 AM  
Anonymous Anonymous said...

Meanwhile in euroland, Tricky spotted a "ump" (who is getting to "hump" whom here?), it is around 30% on staples and non.

No depression here ..(a theory is being advanced that its prevalence on the lips of so many is due to excessive 90's Prozac dosages turning to dependence) rather "monetary and credit growth robust".

Tricky demands (like some new sun king).. no "secondary effects". But surely even no effect is a secondary effect (unless you are excused by a Sellerian accent)). Perhaps he means no secondary effects I and my friends do not like (housing bubble anyone?), the obvious retort being... and what are you going to do about it!

Oh yes and at the end of Q&A... no review of turds being backed up to ECB door. If you take a look a bit of Citi stuff has been turning up.

But surely someone gets to say "Not now Cato"? Who, when, to whom or what?

Time to buy "primary effects" (Oh they already did)...I guess, if they are to be permitted, nay encouraged, after all they are only a secondary expense!

10:56 AM  

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