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Old 01-13-2009, 10:47 AM
 
76 posts, read 210,889 times
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Treasury prices declined Tuesday as yields moved higher, after Federal Reserve Chairman Ben Bernanke said more government action would be needed to strengthen the financial system.

Bernanke said the next step should be getting toxic assets, like those tied to subprime mortgages, off bank balance sheets -- the original intent of the Troubled Asset Relief Program funding.

He also said the Fed may expand its program to buy asset-backed securities, which pool borrowings such as car and student loans and credit-card debt.

"We'll see a continuing shift of risky assets from the private sector to the public sector," said Mustafa Chowdhury, head of U.S. interest rate research at Deutsche Bank. "The challenge is that the government will need to borrow a lot."

BOND REPORT: Treasurys Down After Bernanke Says Fed May Buy U.S. Debt (http://money.cnn.com/news/newsfeeds/articles/djf500/200901131210DOWJONESDJONLINE000510_FORTUNE5.htm - broken link)
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Old 01-13-2009, 01:42 PM
 
Location: Seattle, WA
209 posts, read 549,303 times
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Originally Posted by reverse View Post
Treasury prices declined Tuesday as yields moved higher, after Federal Reserve Chairman Ben Bernanke said more government action would be needed to strengthen the financial system.

Bernanke said the next step should be getting toxic assets, like those tied to subprime mortgages, off bank balance sheets -- the original intent of the Troubled Asset Relief Program funding.

He also said the Fed may expand its program to buy asset-backed securities, which pool borrowings such as car and student loans and credit-card debt.

"We'll see a continuing shift of risky assets from the private sector to the public sector," said Mustafa Chowdhury, head of U.S. interest rate research at Deutsche Bank. "The challenge is that the government will need to borrow a lot."

BOND REPORT: Treasurys Down After Bernanke Says Fed May Buy U.S. Debt (http://money.cnn.com/news/newsfeeds/articles/djf500/200901131210DOWJONESDJONLINE000510_FORTUNE5.htm - broken link)
No surprise but I would hardly call this an actually monetary policy. The Fed money comes out of thin air so basically we are subsidizing a bunch of bad debt and not letting the companies be held accountable for their actions. I am sure something like this won't happen in the future *wink
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