The Fed Must Be Crazy

To provide greater support to mortgage lending and housing markets, the Committee decided today to increase the size of the Federal Reserve’s balance sheet further by purchasing up to an additional $750 billion of agency mortgage-backed securities, bringing its total…

Uncle Ben Vs. Grandpa Ben

The catalyst for today’s rally is the rumor that the Obama Administration is in the process of putting together a bad bank proposal to buy up bad assets from financial institutions.  The financials are crushing today with the XLF up…

The Next Bubble

With the Fed slashing the funds rate to 1% today, it’s worth remembering what happened the last time they did this: We got the most massive housing bubble in the history of mankind.  Well, today, in the midst of this…

Fed To Buy Commercial Paper

The CPFF [Commercial Paper Funding Facility] will provide a liquidity backstop to U.S. issuers of commercial paper through a special purpose vehicle (SPV) that will purchase three-month unsecured and asset backed commercial paper directly from eligible issuers. – FOMC Statement on…

Domino Effect: Understanding The Current Crisis From The Fall Of Lehman To Black Monday II

Lehman’s bankruptcy filing in the early hours of Monday, Sept. 15, sparked a chain reaction that sent credit markets into disarray. It accelerated the downward spiral of giant U.S. insurer American International Group Inc. and precipitated losses for everyone from…