New York Federal Reserve Opens 'Pawn Shop' to Buy Up ABS Junk" "On Wednesday, December 3, 2008 The New York Federal Reserve website reported that they will begin to purchase Asset Backed Securities (ABS) from failed mortgage giants Fannie Mae and Freddie Mac, as well as the Federal Home Loan Banks. They also hinted that they will stop there - everything seems to be on the table now, officially. Treasuries and stocks may see direct effects, with outcomes mixed. Initially, the program will concentrate on non-callable, fixed-rate senior benchmark securities such as Mortgage Backed Securities (MBS), but there are indications in the language used that the program may expand to include other ABS such as privately issued MBS (non-GSE), bonds, stocks and other equities. With this much unprecedented Government intervention in the markets, I find it difficult to apply any models effectively in a predictive fashion. In the long run, I believe will be inflation and devaluation of the dollar - combined with the aftermath of record writedowns, mergers, buyouts, and outright failures that we will see in 2009 - that will be the legacy of these efforts."
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Best Regards,
Anthony M. Freed
eFax 1-210-579-1109
YourMortgageOrYourLife.com
Thursday, 4 December 2008
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