Been reading what the Fed is going to do with the next big shoe to drop in the credit circle.
My thoughts in BOLD.
The Federal Reserves program to boost U.S. Commercial real estate lending may be tailored with such narrow specifications that its impact may fall far short of easing the sector's pain.
Why is the Fed so obsessed with banks wanting to lend? Why should they lend when unemployment is topping almost 10%?
The Fed next week will launch a long-awaited lending program for investors that pledge to buy commercial property bonds that help finance office, retail and apartment buildings buffeted by the credit crunch. The two part program will offer loans against new and old commercial mortgage-backed securities in bid to draw investor demand and lower borrowing rates.
Again.....This type of program has not worked with Agency and Mortgage paper, why would it help for CRE?
Lower financing costs are key to slowing the deterioration of credit for commercial loans that are heading into distress at a heady pace. Without easier credit, defaults will rise and prolong a vicious cycle of foreclosures and price declines.
Easier credit was the reason for such stupid Commercial Real Estate Loans. Why would lower rates ease the problem?
These guys at the FED still don't get it. They will do what ever it takes so that Wall Street doesn't have to take their medicine.
More of the same insane policy.
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