The New Year is beginning where the old one ended -- with uncertainty about when – or whether – the Federal Reserve will begin cutting interest rates.Read More
For years, if not decades, economists have been wringing their hands over the nation’s anemic, and sometimes negative, savings rate.
Federal programs promising to help hundreds of thousands of struggling homeowners avoid foreclosure are falling painfully short of their goals. Policy makers, as a result, are tweaking existing initiatives and considering new ones as pressure builds for more aggressive – and more effective – strategies to forestall a foreclosure tide that threatens to further damage an already battered economy.
Any sighs of relief following the announcement of a contingency government rescue plan for Fannie Mae and Freddie Mac were premature. After easing initially, market pressures on the government services enterprises (GSEs), cornerstones of the secondary mortgage market, have intensified again, fueling speculation that Treasury Secretary Henry Paulson may have to provide the direct government assistance he proposed in the hope that offering the aid would ensure that it would not be needed.
Remember the Treasury Department’s plan to purchase toxic assets from financial institutions as a means of thawing frozen credit markets? Well, that was then and this is now. And now, Treasury has decided that buying toxic underwater assets, as envisioned by TARP (Troubled Asset Relief Program) – the legislation authorizing the plan – wasn’t such a good idea after all.