View Full Version : Federal Reserve working paper recommends a new bond insurer be formed
October 13th 2010, 10:41 AM
The new bond insurer (http://www.claudepenland.com/2010/10/09/fed-working-paper-recommends-launching-a-new-bond-insurance-company/) would act much like Fannie Mae does in the mortgage market.
It would guarantee selected ABS for a premium, which would be invested and used to pay out any losses.
October 13th 2010, 10:43 AM
Typo in poll. "owed" = "owned".
October 13th 2010, 12:08 PM
Fixed your typo. Answer - no, not a good idea.
-- Government traditionally underprices and overpays; we don't need yet another program doing more of the same.
-- Given the overwhelming failure of Fannie and Freddie, it would be best if the government just got the '''' out of the housing market and let the free market [or what's left of it] try to find its equilibrium ... wherever that happens to be.
-- I see this as an explicit attempt to bail out MBS and CDO holders [read: the major banks] and shift even more losses onto the backs of taxpayers. Taken a step further, this has the potential to allow for bailouts of states; if the government's "solution" to the G.M. bankruptcy is a template of what to expect, no thanks.
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