30 year mortgage rates drop when the fed cuts rates. Right? Most consumers think just that when they hear in the media the Fed cut interest rates. However, the rate the Fed cuts is the Fed Funds Rate which has nothing directly to do with mortgage rates. 30 Year Mortgage Rates vs. The Fed The [...]

Today the Federal Reserve announced it will continue it’s purchases of Fannie / Freddie mortgage-backed securities in an attempt to keep mortgage rates low. The Fed will add $750 Billion in GSE commitments on top of the $500 Billion it’s already put on the table. GSE Securities Owned By Fed Reaches $1.25 Trillion It looks [...]

Federal Reserve Chairman, Ben Bernanke, spoke just minutes ago to a UC Berkley conference on the mortgage market challenges moving forward from the current crisis. Ben did a great job outlining the gestation of the crisis by outlining the difference in public versus private securitization. GSE securitization of mortgages is what he called “public” in [...]

An AIG bailout package was announce late Tuesday night by the Federal Reserve rescuing the company by pledging a loan of $85 Billion. AIG needed a bailout due to mortgage related losses and an inability to raise capital fast enough. AIG Bailout American International Group - AIG - gets the liquidity they need to cover [...]

No Fed rate cut announced today leaving traders to scratch their heads in disbelief. A Fed rate cut was overwhelmingly expected by the Street due to the liquidity crisis in the last few days with AIG and Lehman Brothers creating a demand for dollars. Fed Rate Cut Did Not Materialized The Fed decided to keep [...]

A Black Monday scenario for the US stock markets is unlikely due to quick action by the Federal Reserve to add liquidity with rule changes and the creation of a 10 bank cooperative that put $70 Billion into an emergency fund. Black Monday Averted Six Reasons Today Will Not Be Another Black Monday on Wall [...]

Merrill Lynch announced it accepted an offer of $29 a share from Bank of America becoming the most recent conquest in a growing line of Federal Reserve member commercial banks gobbling up investment banks. Merrill Lynch is the second investment bank sold to a mega-bank rival after Bear Stearns succumbed six months ago to JPMorgan [...]

Alan Greenspan was interviewed by Bloomberg’s Al Hunt and opined on the Bear Stearns bailout, Lehman Brothers recent trouble, and his view of the Fed’s role as market stabilizer. I feel this is the most self-serving and disingenuous words I have heard yet from the master spin doctor and former Federal Reserve Chairman. Bear Stearns [...]

Lehman Brothers ( LEH stock symbol) is in free-fall on traders belief the company’s credit risk is too high. The LEH stock is under pressure partly due to owning one of the biggest subprime mortgage players, Aurora Loan Services. LEH Stock Falls - Mortgage Risk The Culprit Being parent to one of the largest subprime [...]