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Bill Gross insists Fed charter includes propping up housing bubbles


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2007 Nov 5, 7:12am   16,700 views  141 comments

by HARM   ➕follow (0)   💰tip   ignore  

PIMCO says housing delinquencies to rise into 2008

NEW YORK, Nov 5 (Reuters) - The Federal Reserve will have to cut its federal funds target rate to prevent a dramatic fall in housing prices in the wake of the subprime meltdown, said the manager of the world's biggest bond fund on Monday.

Thank God for Bill Gross being around to clear up this sort of thing. I had been operating under the mistaken impression that the Fed's Charter had something to do with ensuring the soundness/stability of the banking system and protecting the USD. But evidently, they're in the business of protecting inflated asset prices and propping up housing bubbles.

Whew, glad that's all settled...
HARM

#housing

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134   DinOR   2007 Nov 8, 3:36am  

"and some very probable tax code changes"

Really? How 'bout that!

135   Peter P   2007 Nov 8, 4:07am  

Congress overrides Bush's attempt of fiscal responsibility:

http://www.reuters.com/article/bondsNews/idUSN0823679120071108

136   Richmond   2007 Nov 8, 4:07am  

Duke (1,2,3,4, above),
I think it will take at least those numbers to beat the systemic malfeasance into submission. I think that people will eventually have to meet those standards, or something close to them, in order to bring credibility back to that market. I am still in awe of how things got so far out of control.
Bald greed, ain't it a humdinger.

137   DinOR   2007 Nov 8, 4:23am  

"systemic malfeasance"

Ouch!

I'd heard they have already changed the FICO model? No more "piggy backin'" on accts! Hey, it's a step. Since I don't see much of anyone w/ 5% (let alone 25%) down we can safely dismiss that one. On #4 I've never said we should totally do away with the exemption altogether so I'd be open to moving it out to 8-10 years if it means bringing sanity back?

138   Richmond   2007 Nov 8, 4:47am  

Ooops, sorry. No offense intended.
That's just my oldfartishness coming out. There was a time when those numbers, although high, were the norm. Yes, it was painful for the buyer, but the market seemed to be more stable.
Yeah, we had booms and busts, but the magnitude seemed much more managable. Then again, I guess it's all in it's own context. What we griped about then, that seemed catastrophic, is chump change now.

140   DinOR   2007 Nov 8, 5:44am  

Richmond,

None taken. Did any of us ever imagine a time when actually having a down payment for a home would've been a requirement? The fact that we let people w/ "decent" FICO's "pre-raid" their equity and then turn around and buy w/ zip down can't have been a positive.

141   Different Sean   2007 Nov 8, 3:40pm  

I just realised that if you scale the Oz govt surplus to the American population, you would have an AUD$1.5 trillion surplus now... and we may as well call dollar parity for all intents and purposes...

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