The Fed will cut rates this Tuesday (9/18) and here's why...

NEW -> Contingent Buyer Assistance Program
<p>I'm sure they realize how much consumer spending (debt spending) fuels our economy. I don't think he wants to come out and say housing is totally F'd and cause a greater panic. </p>

<p>As our economy becomes more and more globalized, and as our futures and commodities markets continue to be overrun by speculative traders, the FED's power diminishes. I'd argue that it has more psychological power than anything. </p>
 
<p>My thoughts suddenly turned to commercial paper. Think the big rate cut will have any impact on the the large amount coming due soon. Will the rate cut inject sufficient liquidity to persuade people (or banks) to buy paper that needs to roll over? Am I talking out of my hind end?</p>
 
<em>"Will the rate cut inject sufficient liquidity to persuade people (or banks) to buy paper that needs to roll over?"</em>





awgee was just speculating on this same issue in the other thread. Perhaps this concern is bigger in the FEDs mind than inflation.
 
IR - I can not tell you the timing, whether it would be today, next week, or how in the months following, but my take is that BB has no choice, but to cut. And when I say <b>NO</b> choice, I mean none. The member banks are in trouble, and the Fed has only one pill.
 
<em>"And when I say <strong>NO</strong> choice, I mean none. The member banks are in trouble, and the Fed has only one pill."</em>





Wow, that is something I really don't want to think about...
 
Posting it here too check out the <a href="http://www.abalert.com/Public/MarketPlace/MarketStatistics/index.cfm">MBS issuance</a>.
 
I've never actually met anyone else who's read the asset backed alert. It gets distributed at my work. Business is dying. Theres no doubt asset managers are scared, warehouse lines are all frozen.
 
News from the inside. Yea! Would you mind sharing a bit more? You can leave out names and details because we're interested in the overall story and not the who's who.
 
<p>Theres not a whole lot thats not already out there in the open. Last year and the first half of this year, new CDO/MBS issuance was going gangbusters. The banks were trying to get these deals priced before the spreads widened any further. </p>

<p>CLO's are doing much better than ABS/MBS CDO's since corporate defaults are still at historical lows. I'm not quite sure what you guys would like to know, any specific questions?</p>
 
<em>"I'm not quite sure what you guys would like to know, any specific questions?"</em>





Is there still a market for securities based on home mortgages?





How big is the market now compared to the peak in percentage terms?





Are non-conforming loans still being packaged and sold?





Is there any signs that spreads will not continue to widen?





What is the talk in the CDO market about the impact of inflation?
 
<p>Oh dude you just opened pandora's box. </p>

<p>Can you give us more of an idea of what part of the industry you are in? Are you in a specific portion or is it more of a broad range? Do you work with MBS deals or CDO deals as a whole? I am familar with MBS deals and I know what role the trustee has but others here may or may not. If you are not a trustee for MBS is there much of a difference in a trustee of CDO deals? I warn you this is only the beginning of questions. </p>

<p>But answer IrvineRenter's questions first because they are great and more important. Well just one do you read Tanta's posts over at CalculatedRisk?</p>
 
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