Bernanke Decides That Entire Economy Is Worth Saving
Money-printing liquidity trapper Ben Bernanke has been a Local Loser in recent months after rapidly cutting the federal funds rate to negative 1,000% to no effect whatsoever, except national embarrassment. He's had to print Master Paulson's money, alone, every night, as punishment. He is not allowed to shave. But as Paulson and his flack Neel "Chump" Kashkari refuse to do anything right, Bernanke's had enough and he's just going to sing it from the rooftops of America! Today, in a bigspeech, he declared that the "government must step up efforts to prevent home foreclosures, with options including buying delinquent mortgages and providing bigger incentives for refinancing loans." Meanwhile, back in their lair, Paulson and Kashkari are discussing what evil they must next bring to the global economy.
The government could buy “delinquent or at-risk mortgages in bulk,” then refinance them through the federal Hope for Homeowners program, Bernanke said in a speech at a Fed conference in Washington. Congress could also help reduce loan rates and lender insurance premiums, he said.
Each option would require “some commitment of public funds,” Bernanke said, underscoring his position that the central bank alone can’t revive the economy through its interest- rate cuts and emergency lending programs. Foreclosures may begin on 2.25 million homes this year, more than double the pace before the financial crisis, he said.
“More needs to be done,” Bernanke said in prepared remarks to the Fed research conference on housing and mortgage markets. “Policy initiatives to reduce the number of preventable foreclosures should be high on the agenda.”
Phew. Something along these lines, yes, please. Since avoiding moral hazard is no longer a concern in any way -- we just guaranteed $300 billion in Citibank loans! Because! Citibank! -- just push those idiots who are underwater on their mortgages and headed towards default into some sort of refinancing or managed bankruptcy. Stop foreclosures! Determine prices of illiquid assets! END THE CONSTANT DEATH OF MONEY.
Bernanke you must do this! Because your colleagues are determined to focus on nonsensical things, if they get their way:
Treasury Secretary Henry Paulson is considering a new plan to reduce borrowing rates involving the purchase of mortgage-backed securities issued by Fannie and Freddie, a government official said yesterday.
The Treasury, which already has a program to buy the securities, could step up those purchases to drive down interest rates on some loans to 4.5 percent, the official said on condition of anonymity. The plan is preliminary and could change.
Because what the economy needs now is more people, no matter their income or credit rating, buying houses. They'll cook 'em up a real nice deal, won't pay a dime for five years!