Muzzle that Market Manipulator!

The Financial Times spent the Easter weekend flapping merrily at the very point of its own petard:

...But today, rumors about banks are uniquely powerful, not only because there is such uncertainty about liquidity, but because the rumor itself can cause investors to lose confidence in a bank...All effort should be made to stop such rumors: they damage financial stability and allow some investors to profit at the expense of others...

Muzzle the market manipulators [$$]
Editorial comment
The Financial Times Mar. 22 2008

Central banks on both sides of the Atlantic are actively engaged in discussions about the feasibility of mass purchases of mortgage-backed securities as a possible solution to the credit crisis...The Bank of England appears most enthusiastic to explore the idea...

Central banks float rescue ideas>[$$]
by Chris Giles and Krishna Guha
The Financial Times Mar. 22 2008

LONDON, March 22 (Reuters) - The Bank of England denied a report in the Financial Times on Saturday that it was proposing using public funds to make mass purchases of mortgage-backed securities in order to ease the credit crisis...

BoE denies proposing to buy mortgage securities[$$]
Reuters (via The Guardian) Mar. 22 2008

The US Federal Reserve, responding to press reports, said it is not discussing coordinated purchases of mortgage-backed securities with other central banks. “The Federal Reserve is not involved in discussions with foreign central banks for coordinated buying of MBS,” a senior Fed official said.

Fed: No Talks on Joint MBS Buying[$$]
By Greg Ip
The Wall Street Journal Mar. 22 2008

Merry japes aside, the Fed actions over the last couple of weeks, along with the relaxation of capital requirements at Fannie Mae (FNM) and Freddie Mac (FRE), represent, for all practical purposes and however (allegedly) temporary, the mass purchase of US mortgage-backed securities. Making the MBS nationalization of the US mortgage market. Making the coordination question entirely moot.

Comments

[SergeBirbrair]

How can ANYBODY in their right minds trust the banking system today????

1) Lots of those banks have brokerage arms,
UBS, BAC, Wachovia Deutche Bank, the first names come to mind and how well did their research did for them? The researchers and analysts put banks themselves in trillions of dollars mortgage problem! If the system can't take care of itself, WHY would anybody expect the system to take care of...Investors!?

2) Talking about Investors.
The banking / brokerage system locked their biggest clients in $330,000,000,000 ARS mess!!!!
nothingcontroversial.c...

Should this firm our trust in the system?????

[venividivici]

I agree entirely. This market has no credibility whatsoever. These people built a skyscraper out of playing cards, paid themselves a king's ransom and then a hundred billion or so more and now demand to be bailed, for the common good of course.

[nukldrager]

If the reporting is accurate it's a $450 trillion house of cards with the housing part at around $10 trillion. It would seem that the perps took a dump on the common good. But I look around and mall parking lots are full. Highways are busy. You still have to wait in line at the grocery store.
So maybe it hasn't hit the ground yet?