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View Diary: BREAKING: Fed Launches $40-Billion-a-Month QE3 Stimulus (129 comments)

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  •  Fed to invest $40B/m on MBS's says Good Risk (4+ / 0-)
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    marianevans, blue aardvark, MKSinSA, askew

    I wish I understodd the world of finance better, but I get two things from the article:

    One, if the Fed is willing to risk $40 Billion a month buying up Mortgaged Backed Securities, it must view them as a far lower risk today than they were went the Market collapsed in 2008.

    The DOW is up over 100 points on the news... supporting that assumption.

    * Bill Clinton made me a Democrat. But George W Bush made me a Liberal.

    by Mugsy on Thu Sep 13, 2012 at 10:20:06 AM PDT

    •  You say that (4+ / 0-)

      like you think the fed is actually risking its own money on those mortgage based securities...

    •  But they are safer today. (1+ / 0-)
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      For one thing, the mortgage industry has vastly over-corrected for the irresponsibility of the spree during the mortgage bubble.  The banks have been tighter than a lug nut for the past 3-4 years when it comes to mortgage lending.

      For another, all of the defaults and foreclosures over the past few years have tended to weed out the riskier mortgages that were given out during the bubble.

      Art is the handmaid of human good.

      by joe from Lowell on Thu Sep 13, 2012 at 11:38:57 AM PDT

      [ Parent ]

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