Who is not printing money?

[NoahA]

I wholeheartedly agree. Well said!

P.S. Banks don't sell their Mortgages to the Fed.

This is right from Investopedia

"Quantitative easing usually involves a country's central bank purchasing longer-term government bonds, as well as other types of assets, such as mortgage-backed securities (MBS)"

https://www.investopedia.com/terms/q/quantitative-easing.asp

Now how does a mortgage get packaged into a security?

https://www.investopedia.com/terms/m/mbs.asp

What Is a Mortgage-Backed Security (MBS)?
A mortgage-backed security (MBS) is an investment similar to a bond that is made up of a bundle of home loans bought from the banks that issued them.


So essentially, the bank writes the mortgage, then packages them all together and calls this debt a security, and then the FED buys it.

Connect the dots buddy. I honestly have no idea what narrative you are trying to push. Jerome Powell, is that you??? Are you also going to convince me that 6-7% inflation is good for me???

 

[piezoe]

This is right from Investopedia

"Quantitative easing usually involves a country's central bank purchasing longer-term government bonds, as well as other types of assets, such as mortgage-backed securities (MBS)"

https://www.investopedia.com/terms/q/quantitative-easing.asp

Now how does a mortgage get packaged into a security?

https://www.investopedia.com/terms/m/mbs.asp

What Is a Mortgage-Backed Security (MBS)?
A mortgage-backed security (MBS) is an investment similar to a bond that is made up of a bundle of home loans bought from the banks that issued them.


So essentially, the bank writes the mortgage, then packages them all together and calls this debt a security, and then the FED buys it.

Connect the dots buddy. I honestly have no idea what narrative you are trying to push. Jerome Powell, is that you??? Are you also going to convince me that 6-7% inflation is good for me???

You misunderrstood what investipedia wrote. I should point out that investipedia is not always accurate nor complete in there brief entries.Note that the Investipedia article you read applies to "countries" in general. Not specifically to the U.S. (Note their use of the word "Country".) We are talking about the U.S. Fed here, not central banks in other countries.

MBS, mortgage- backed securities, are not mortgages. They are tranched securities backed by large packages of mortgages. The Fed does not buy mortgages. Fanny and Freddy, and some banks, individuals, etc., buy them, but not the Fed. The Investopepia article is correct, and you are not. The Investipedia artcle is misleading as it would suggest that the Fed buys MDS as a routine practice . They don't. The first time in history, the Fed bought MBS from banks was during the financial crisis. That's because these MBS, or more broadly CDOs (collaterized debt obligations), held by banks had to be marked to market everyday at midnight to meet regulations. Since the MBS market froze when it became apparent that their triple A rating was not accurate, there was an insufficiently liquid market for MBS to assign a market price to them. The Fed then stepped in and did their own evaluation and bought MBS from banks that would be otherwise solvent once a reasonable value could be assigned to their MBS holdings. The Fed does not buy mortgages. Would they in the future. I suspect not, but who knows?

Please read the the books I suggested to you.

 

[ipatent]

You misunderrstood what investipedia wrote. I should point out that investipedia is not always accurate nor complete in there brief entries.Note that the Investipedia article you read applies to "countries" in general. Not specifically to the U.S. (Note their use of the word "Country".) We are talking about the U.S. Fed here, not central banks in other countries.

MBS, mortgage- backed securities, are not mortgages. They are tranched securities backed by large packages of mortgages. The Fed does not buy mortgages. Fanny and Freddy, and some banks, individuals, etc., buy them, but not the Fed. The Investopepia article is correct, and you are not. The Investipedia artcle is misleading as it would suggest that the Fed buys MDS as a routine practice . They don't. The first time in history, the Fed bought MBS from banks was during the financial crisis. That's because these MBS, or more broadly CDOs (collaterized debt obligations), held by banks had to be marked to market everyday at midnight to meet regulations. Since the MBS market froze when it became apparent that their triple A rating was not accurate, there was an insufficiently liquid market for MBS to assign a market price to them. The Fed then stepped in and did their own evaluation and bought MBS from banks that would be otherwise solvent once a reasonable value could be assigned to their MBS holdings. The Fed does not buy mortgages. Would they in the future. I suspect not, but who knows?

Please read the the books I suggested to you.

I seem to remember the Fed buying MBSs after the 2008 crisis.

 

[piezoe]

I seem to remember the Fed buying MBSs after the 2008 crisis.

see my response to NoahA above. (Or should I have written: "Read my response to NoahA" ?)

 

[ipatent]

Or should I have written: "Read my response to NoahA"

My bad.

 

[Overnight]

...

MBS, mortgage- backed securities, are not mortgages. They are tranched securities backed by large packages of mortgages. The Fed does not buy mortgages. Fanny and Freddy, and some banks, individuals, etc., buy them, but not the Fed...

I can never pass up the chance for a clip. Sorry.

 

[Overnight]

And don't forget the follow-up!

 

[NoahA]

The Fed does not buy mortgages.

If you can't see that an MBS is simply a bundle of loans aggregated together then I can't help you. You can that they are securities but aren't mortgages, well, that's simply a slight of hand illusion. Next you're going to convince me that a bottle of beer isn't alcohol, but simply a brown liquid.

But if you're saying the FED doesn't buy them, what does this chart mean? What does the FED own if they have 2.5B of whatever this is on their balance sheet?

https://fred.stlouisfed.org/series/WSHOMCB

 

[murray t turtle]

This is right from Investopedia

"Quantitative easing usually involves a country's central bank purchasing longer-term government bonds, as well as other types of assets, such as mortgage-backed securities (MBS)"

https://www.investopedia.com/terms/q/quantitative-easing.asp

Now how does a mortgage get packaged into a security?

https://www.investopedia.com/terms/m/mbs.asp

What Is a Mortgage-Backed Security (MBS)?
A mortgage-backed security (MBS) is an investment similar to a bond that is made up of a bundle of home loans bought from the banks that issued them.


So essentially, the bank writes the mortgage, then packages them all together and calls this debt a security, and then the FED buys it.

Connect the dots buddy. I honestly have no idea what narrative you are trying to push. Jerome Powell, is that you??? Are you also going to convince me that 6-7% inflation is good for me???

%%
NO\ i don't think even 2% inflation target is good over 10 years[20%,LOL].But that'$ life.
Plenty of banks keep thier mortgages+ plenty of banks watch thier money better than we do/approved appraisers only, for RE.
This is from buying + selling RE for decades.
C+ WASH Mutual may do that + went broke/almost broke.

 

[piezoe]

If you can't see that an MBS is simply a bundle of loans aggregated together then I can't help you. You can that they are securities but aren't mortgages, well, that's simply a slight of hand illusion. Next you're going to convince me that a bottle of beer isn't alcohol, but simply a brown liquid.

But if you're saying the FED doesn't buy them, what does this chart mean? What does the FED own if they have 2.5B of whatever this is on their balance sheet?

View attachment 274585

https://fred.stlou

View attachment 274585

https://fred.stlouisfed.org/series/WSHOMCB

isfed.org/series/WSHOMCB

Yes, I can say this and I am saying this: "You can [say] that they are securities but aren't mortgages..."

You over looked a few, not inconsequential, details. One is that had MBS been mortgages there'd have been no financial crisis in 2007-9.

Furthermore had the MBS been mortgages, the Fed wouldn't have bought them. Nor does the Fed buy mortgages now.

You showed a graph of the Fed's MBS holdings. not mortgages. Note that MBS holdings prior to March 2009 are zero. It will take some years for the Fed to unwind its mortgage backed securities that they began acquiring during the crisis as a means of returning liquidity to otherwise solvent banks.

They began discounting and buying MBS as an emergency measure during a world wide financial crisis caused in no small part by the Greenspan Fed's insouciance in the face of many warnings about lax underwriting standards in the mortgage industry.

Once again the Fed does not buy mortgages. So far as I know they have no plans to start buying mortgages. There are many buyers for mortgages, the Fed is not one of them.

When we are young we have a tendency to jump to unfounded conclusions and form our opinions based on incomplete information. Once we have formed those opinions we have a tendency to adopt an "i'll see it when I believe it attitude." This attitude is not helpful when someone comes along with more complete information and tries to do us a favor by pointing out where our information is incomplete or incorrect. Those helpful people usually don't stick around if their efforts seem wasted. They have better things to do with their time.