tagged w/ GSE
U.S. Treasury Secretary Timothy F. Geithner presented Congress with a set of options for weaning the $11 trillion mortgage market from its dependence on the government, while calling for changes to be phased in “responsibly and carefully” to avoid economic disruptions.
The report delivered today by Geithner and Housing and Urban Development Secretary Shaun Donovan presents three approaches for a future housing finance system. It also calls for the government to shrink “and ultimately wind down” Fannie Mae and Freddie Mac, the bailed-out government-sponsored enterprise companies that helped fuel the housing bubble before being felled by investments in subprime mortgages.
Read more at:
http://www.bloomberg.com/news/2011-02-11/obama-administration-calls-for-ultimately-winding-down-fannie-freddie.htmlU.S. Treasury Secretary Timothy F. Geithner presented Congress with a set of options... more
Acne giving you a problem? Tired of medicines that does not help? Check into this herbal remedy.Acne giving you a problem? Tired of medicines that does not help? Check into this... more
3/18/2010 Mike Shanklin interviews Dr Arnold Kling from the CATO Institute at Campbell University just before his lecture to a group of students. Discussed includes the Federal Reserve, monetary policy, taxation, GSEs (Government Sponsored Enterprises), toxic assets, and much, much more3/18/2010 Mike Shanklin interviews Dr Arnold Kling from the CATO Institute at Campbell... more
The government announced Tuesday it will spend $600 billion to take on the obligations of Fannie Mae, Freddie Mac and Ginnie Mae in order to reduce borrowing costs for the government-sponsored enterprises (GSEs).
Agency debt has always carried an implicit government guarantee but took on an explicit guarantee after the September takeover of Fannie and Freddie. Still, agency debt has been trading substantially higher than U.S. sovereign debt.
“Spreads of rates on GSE debt and on GSE-guaranteed mortgages have widened appreciably of late. This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial markets more generally,” the press release announcing the program said.
After the announcement, the spread narrowed sharply. The spread between 10-year Treasuries and similar Agencies narrowed by 28 basis points but remains at a historically high 132 bps.
Beginning next week, the Federal Reserve will commence buying $100 billion of GSE debt through a series of reverse auctions.
The remaining $500 billion will be used to buy mortgage-backed securities on homes that carry GSE guarantees. The Fed, through asset managers, aims to begin buying the debt by year-end. Purchases of both direct obligations and MBS are expected to take place over several quarters, the Fed said.The government announced Tuesday it will spend $600 billion to take on the obligations... more