Fannie and Freddie Shell Out Exec. Bonuses As Fed Pumps More Money Into Failed Mortgage Giants

Fannie and Freddie announced today that like AIG, it will award retention bonuses to some execs.

Will these mortgage giants receive the same "peasants with pitchforks" backlash as AIG?

Somehow I doubt it. Congressmen like Chris Dodd and Barney Frank are ultimately responsible for the failures of Fannie and Freddie.

Stocks rallied today as The Fed announced it's injecting $1 Trillion into the housing market.

Specifically, it will buy more mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac. The central bank will buy an additional $750 billion, bringing its total purchases of these securities to $1.25 trillion. It also will boost its purchase of Fannie and Freddie debt to $200 billion.

WASHINGTON (AP) -- The Federal Reserve announced Wednesday that it will inject about $1 trillion into the economy in a bold effort to help the battered housing market and lift the country out of recession.

At the same time, the Fed left a key short-term bank lending rate at a record low of between zero and 0.25 percent. Economists predict the Fed will hold the rate in that zone for the rest of this year and for most -- if not all -- of next year.

In a new program, the Fed said it will buy up to $300 billion of long-term bonds, a move that should boost Treasury prices and drive down their rates.

That would ripple through and lower rates on other kinds of debt. The last time the Fed set out to influence long-term interest rates was during the 1960s.

And expanding an existing program, the Fed said it will buy more mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac. The central bank will buy an additional $750 billion, bringing its total purchases of these securities to $1.25 trillion. It also will boost its purchase of Fannie and Freddie debt to $200 billion.

"This is not only going to keep mortgage rates low for a long period of time," said Greg McBride, a senior financial analyst at Bankrate.com. "The mere announcement may produce a honeymoon effect and bring mortgage rates down to even lower levels in the coming days."

Fed Chief Bernanke: Another $700 Billion For Banks?

I feel your pain, Harry Reid! I wanna scream too!

Hey! TARP I worked out so well! Let's give them more!

Is it ever going to stop!?!? Someone take away Obam's ATM card. Please!

Bloomberg reports:

March 3 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said policy makers may need to expand aid to the banking system beyond the $700 billion already approved and take other aggressive measures even at the cost of soaring fiscal deficits.

“Without a reasonable degree of financial stability, a sustainable recovery will not occur,” the Fed chairman said today in testimony prepared for the Senate Budget Committee. “Although progress has been made on the financial front since last fall, more needs to be done.”

Bernanke’s comments suggest he sees a role for bigger federal outlays as the Obama administration seeks congressional approval for a budget of $3.55 trillion for the fiscal year beginning in October. President Barack Obama has already signed into a law a $787 billion economic stimulus package of tax cuts and government spending.

Obama’s first budget seeks standby authority for as much as $750 billion in new aid to the financial industry. Whether those funds will be needed “depends on the results of the current supervisory assessment of banks” and the evolution of the economy, Bernanke said.

Bernanke said policy makers would have “preferred to avoid” what is likely to be the largest ratio of federal debt compared with gross domestic product since the end of World War II, and he urged lawmakers not to lose sight of fiscal discipline.

When in doubt, blame Bush!

Finally Some Optimism And Hope Among The Doom And Gloom, Fed Chair Bernanke Says "Reasonable Prospect" Recession Will End In 2009

Thank you Fed Chair Bernanke for giving the markets and Americans something to look forward to, quite unlike President Apocolypto and Treasury Secretary Market Killer.




Hope and optimism moves markets.

The Associated Press Reports:

NEW YORK (AP) -- Federal Reserve Chairman Ben Bernanke has reassured Wall Street by telling Congress the recession might end this year.

In his semiannual report to the Senate Banking Committee, Bernanke predicted the economy is likely to keep contracting in the first six months of 2009. But he also said "there is a reasonable prospect" the recession will end this year. He warned that a recovery will require getting credit and financial markets to operate normally.

While Bernanke's assessment of the economy helped ease some pressure on the market, it also came after days of heavy selling that left the Dow Jones industrial average and the Standard & Poor's 500 index near 12-year lows, so a bounce in stocks wasn't a surprise. Stocks made cheaper by the selloff attracted bargain-hunting traders. Also, some, better-than-expected quarterly numbers from Home Depot Inc. helped cool some anxiety about the economy.