liorio1

Wall Street Breakfast: Must-Know News

Clean and crisp news, no nonsense added, that's why I read you every day, great stuff. Thanks.

The Fed is Terrified

I am starting to believe that what we need here is simplicity and then let the chips fall where there may. Potential solution? Freeze the ARMS rates and anyone else on any other type of mortgage takes it on the chin. No more interest rate drops and stop the liquidity spigot. Now no more variables for the banks to hide behind, let them unwind their positions ( most of it is hot air anyway and will not be made up in the short run). The point is, we need to get the air out of the bubble and no one is addressing that. Seems to me, JQ Public is more worried about food, gas and the price of bread than the financial sector. Looks like we are forcing a recession with a high dose of inflation onto Main St (stagflation anyone?)

Bernanke's Plan Could Work

Community/Regional banks will probably go along with this notion as they have roots in their community and that is where their bread and butter is in the long run. On the other hand, "big banks", by their nature, probably will not unless there is a legal directive to do so by the Fed or state regulator. Several reasons for this: bureaucratic inertia, complexity of the portfolio (eg what has already been reserved for - done only on a category basis) and greed (stupidity?) - A monumental bailout, which is already underway with lower interest rates set by the Fed, who else besides the banks are benefitting from them? The sub-prime borrowers? Check the refi fates.