The Fed Gives the Credit Markets a Big Enema.

OK, Here's How the Credit Markets Work.. Got It ?

In what might be the first actual sign that Washington DC is looking to do soemthing that actually might directly help consumers in this financial mess, the Fed took two huge steps to make credit more available to consumers.

The Fed will buy $100 billion in debt owed by mortgage giants Freddie Mac, Fannie Mae, and the Federal Home Loan Bank. They also will buy another $500 in securities backed by mortgages from the same lenders. Most significantly, the will also are starting a $200 fund to support consumer finance, which includes student loans, auto and credit card loans backed by the Small Business Adminstration. It's all planned to clear any and all debt away from the home and credit markets, so that they'll be able to lend.

How impossible has it been to get credit lately? Last year, about $246 billion of credit was issued. This year, it has been virtually zero. No person or business has been able to get credit to buy or invest. By the time all of these bailouts and programs are done, Washington will have spent almost $3 trillion of your tax money to avert this recession ... All this better work.

This program is so complicated, that the Fed will be unable to implemnt it until February - after current Treasury Secretary Paulson has left office. If this fails, he may be glad he'e gone. So, if the credit markets are opened up again, what should we Americans do in that case? Avoid credit at all costs.....

Seriously, this is how we got into the mess in the first place - overextending ourselves. Buying McMansions and $40,000 cars that we don't need is what drove us into this pit, so why do it all over again? Ameica needs to do two simple things: One, we need to learn to not spend so much, but SAVE more. Secondly, Congress needs to put back into place all the regulations that restricted Wall Street from screwing the citizens and, in turn, themselves into bankruptcy again. The days of greed are over. Little profits, and smaller debts.....

Once again, i have NO IDEA if all of this will work. I have a degree in Economics, but this is Finance, which was not part of my curriculum. However, I have some serious reservations and concerns. This is the first part of the plan where I can actually see some benefits for America's citizens, not just it's banks. But , with all the money spent, the possibility of inflation are unsurmountable national debt. May we learn SOMETHING from all of this.....

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