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Fed Must Buy Securities to Halt Crisis, Cambiar's Barish Says [View All]

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NeoConsSuck Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Mar-16-08 05:04 PM
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Fed Must Buy Securities to Halt Crisis, Cambiar's Barish Says
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Source: Bloomberg.com

March 16 (Bloomberg) -- The U.S. Federal Reserve must start buying or borrowing mortgage-related securities from banks and brokers to forestall an economic disaster, said Brian Barish, who helps manage $8 billion at Cambiar Investors LLC.

``The Great Depression was caused by a failure by the Fed to respond to a crisis of somewhat similar character,'' Barish, president of Denver-based Cambiar, said in an interview yesterday. ``We better get the right policy real quick or you could just have a situation that should have been a run-of-the- mill recession turn into something worse.''

Credit markets have seized up because of uncertainty over the value of securities backed by mortgages, which have already led to more than $195 billion in writedowns and credit losses at banks and brokers. The Fed said on March 11 it would start lending Treasuries in exchange for debt including mortgage- backed securities for the first time beginning March 27. Still, market confidence continued to erode, and by March 14 the Fed was providing emergency funding to Bear Stearns Cos.

<snip>
Barish said the question that's ``unanswerable'' is how much of these securities the Fed needs to buy or borrow. He estimated it could be $400 billion or $500 billion. The Fed's March 11 statement said it would make up to $200 billion available through weekly auctions, and officials told reporters the program may be increased.

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=a76...



So, these worthless pieces of junk, that were created by investment bankers, for investment bankers to make them rich, are now worthless, so the Fed (American taxpayers), should now buy and own them??

This is another case of privatizing the profits, but socialize the risks. Were they clamoring for the Fed (American taxpayer) to buy these risky investments when they were creating windfall profits a few years ago? Of course not.

The golden rule of capitalism can be summed up as: Don't meddle in the free market system, unless the capitalists start losing big time, then the American taxpayer should be forced to bear the brunt of their bad investments.
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  -Fed Must Buy Securities to Halt Crisis, Cambiar's Barish Says NeoConsSuck  Mar-16-08 05:04 PM   #0 
  - Well if they are going to buy crap from  fasttense   Mar-16-08 05:13 PM   #1 
  - Once they buy the crappy homes, what do they do with them?  dkf   Mar-16-08 05:18 PM   #2 
  - Thats the ticket blame the people these PARASITIC financial companies steered into bad financial  Vincardog   Mar-16-08 05:36 PM   #3 
  - I have been waiting to buy a house because I know how much  dkf   Mar-16-08 05:42 PM   #4 
  - It depends on which financial institution you are talking about. Someone made money when they  Vincardog   Mar-16-08 05:50 PM   #8 
  - Well the US hardly manufactures stuff anymore, only financial products.  dkf   Mar-16-08 05:55 PM   #10 
     - That trend was also foisted upon us by the very financial institutions you are defending.  Vincardog   Mar-16-08 05:57 PM   #11 
        - Oh, I'm not defending financial institutions.  dkf   Mar-16-08 06:08 PM   #13 
  - I used to ask friends and family who could afford these three hundred thousand dollar homes.  sarcasmo   Mar-16-08 07:17 PM   #24 
  - oh dear -- you've ingested some bad information  nashville_brook   Mar-16-08 07:31 PM   #26 
  - That's been my concern for years, now.  krkaufman   Mar-17-08 05:44 PM   #29 
  - Victims?  PSPS   Mar-16-08 08:19 PM   #27 
  - Reports shows that three out of four loans were pushed on borrowers by fraudulent predators  Robbien   Mar-16-08 05:43 PM   #5 
     - Just because someone offers you a loan doesn't mean you should take it.  dkf   Mar-16-08 05:47 PM   #7 
        - When everyone in the closing meeting is lying to you  Robbien   Mar-16-08 05:58 PM   #12 
           - Hey, I am constantly telling my brother and sister to save their money  dkf   Mar-16-08 06:12 PM   #14 
              - In poor areas, predatory loans were as high as sixty percent  Robbien   Mar-16-08 06:21 PM   #15 
                 - The people that made out like bandits were the real estate brokers  dkf   Mar-16-08 06:34 PM   #17 
                    - The mortgages have value  Robbien   Mar-16-08 06:43 PM   #20 
                       - CDOS are based on the original Mortgages.  dkf   Mar-16-08 07:00 PM   #21 
                          - Right now with Bear  Robbien   Mar-16-08 07:14 PM   #23 
  - Your making WAY TOO MUCH Sense  FreakinDJ   Mar-16-08 06:43 PM   #19 
  - This much debt monetization will drive inflation through the roof.  roamer65   Mar-16-08 05:43 PM   # 
  - They Should Put the Fraudsters in Jail!  Demeter   Mar-16-08 05:43 PM   #6 
  - No they should let the share holders sue and recover their losses from the personnel finances of the  Vincardog   Mar-16-08 05:55 PM   #9 
     - The US Doesn't Generally Use Prison for Debtors  Demeter   Mar-16-08 07:18 PM   #25 
  - this whole thing is a plan made long ago-the total rape of america  natrat   Mar-16-08 06:29 PM   #16 
  - The RTC to end all RTC's. The Grand RTC with new 50 story building coming soon.  Neshanic   Mar-16-08 06:34 PM   #18 
  - With money from who's A$$hole? I mean this is why the dollar is falling faster than chicken little  sarcasmo   Mar-16-08 07:06 PM   #22 
  - Crisco to Barish - Go Jump Out a Fucking Window  Crisco   Mar-16-08 08:29 PM   #28 
  - This is a stupid way of fixing the problem  Ichingcarpenter   Mar-17-08 05:48 PM   #30 
  - Here's the link to Rogers  NeoConsSuck   Mar-17-08 06:02 PM   #32 
     - thanks n/t  Ichingcarpenter   Mar-17-08 06:03 PM   #33 
  - The FED is NOT the same thing as the American Taxpayer.  votesomemore   Mar-17-08 05:56 PM   #31 
 

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