Fed, Treasury Department announce $800b plan to loosen credit market
11/25/2008, 2:05 PM
By Drew Johnson
In an effort to loosen the ever-tightening credit market, the Federal Reserve and Treasury Department have announced two plans – worth $800 billion in all – to make credit and loans more readily available to consumers. The programs are intended to keep the U.S. from sliding into a deep recession, and could be just what the automakers need to get by during these tough times.
The first program will see the Federal Reserve offering $200 billion for consumer debt, which will aid consumer loans such as credit cards, auto loans and student loans, according to the Detroit News. The Fed is hopeful that its program will bolster interest in such loans through lower interest rates and greater availability of credit.
The combination of freer credit and end off year sales could mean a jump in December new car sales figures. The Detroit Three argue their current financial situation is largely the result of credit crunch, which made it harder for consumers to buy cars.
The remaining $600 billion will be comprised of the purchase of mortgaged-backed assets. One-hundred billion of that will go toward purchasing mortgages from Fannie Mae and Freddie Mac, while the remaining $500 billion will cover mortgages usually sold to investors.
It remains to be seen how the market will react to a looser credit market, but the news is certainly encouraging for the automakers. The availability of credit was one of the biggest factors in dwindling new car sales, so it’s possible the move could bolster sales — albeit not back to 2007 levels.
11/25, 2:13 PM
posted by:
Impulsive
Max out your credit cards and buy gold … all will be well.
11/25, 3:40 PM
posted by:
yarddog82abn
If you max-out everything and you go bk, it’ll be O.K. the Fed will bail you out….
I for one I’m in the process of stilling some homes that have gone on the foreclosure list, homes that are $800.000 and going for $360.000 in good neighborhoods, just rent them out for now, and in a few years SALE!, SALE!, SALE!…
11/25, 4:08 PM
posted by:
JakeK66
Buy assets cheap… sell high…It’s a buyers market and you could make a killing if you think right and don’t over-react. Maybe Ford stock isn’t a bad idea… And people always need certain commodities and goods to live – just look who made it rich in the Great Depression – those who bought cheap – and what does well when times are bad.
11/25, 4:50 PM
posted by:
jayjc08
This has got to be some of the most ridiculous sh!it I have read. 800 BILLION dollars? What are tax payers gonna get back from that? Are we just gonna print more money and our monetary policy will go to hell?
At this rate, we ARE going to go through another depression. This is the same exact policies that were going on with FDR, to help the us through the Great Depression. The fall just gets higher and higher from here buddy. Banks should have been wiser not to give out money to people who couldn’t pay it back, among other things, Detroit should cut clean (bankruptcy) as early as possible, cut clean of all their debts, and we should take the fall. That doesn’t mean there are ways to soften the blow… but certainly raising the bar doesn’t help.
11/25, 6:13 PM
posted by:
idrinorbarsaku
follow those idiots, max out your credit cards! no wonder we’re going through this…there are people and dumb as all you
11/25, 10:17 PM
posted by:
DB9
Now were headed for $3 TRILLION in total treasury obligations, not counting the the total debt and budgetary deficit, while US GDP is $10 TRILLION – TDF:-))) Run! Better hope the Chinese don’t get tired of buying our marketable securities to fund all this ?/! Then again maybe it’s part of their master plan? Yeah, that’s it…
http://www.youtube.com/watch?v=anuAFWfjA8Y&feature=related
DB9
11/26, 12:16 AM
posted by:
johnnycanuck
Loosen credit, yeah right. That’s like using a debit card to pay a hooker. Or would that be loose and credit?