Reply #10: They Just buy T Bills [View All]

[Demeter]

no more mortgages. They are selling the mortgages (the bad ones) back to those responsible for writing them.

It's still a shell game--there just aren't any private players.



Fed moves towards monetary easing

The US Federal Reserve on Tuesday took a first step towards easing monetary policy, as it downgraded its view of the economic outlook amid rising fears that the US could face a “double-dip” recession.

Meeting in Washington, Fed monetary policymakers agreed to begin reinvesting proceeds from expiring mortgage-backed securities in longer-term Treasuries, thereby preventing a natural shrinking of the $2,300bn balance sheet the US central bank built up during the recession.

The move signals a significant shift in thinking at the Fed, which only a few months ago was tilting towards tightening
monetary policy in order to fend off inflation as the economic recovery gathered strength.
Read more >>
http://link.ft.com/r/R5WAEE/6VEZH0/T10SH/729B77/JIF518/UP/t