CNN Chief Business Correspondent
While everyone is carrying on about bonuses, the Fed is actually doing three things:
"Injecting" $300 BILLION into the system by buying that amount of bonds back from the governments creditors. That puts $300 B into the world's economic system for use, possibly making some of that money available for large companies that continue to have trouble borrowing.
Buying up another $750 Billion in mortgages from Fannie/Freddie (bringing the total to $1.2 trillion). That gives F/F that much more money to buy mortgages from banks, meaning bank lending standards can loosen up a smidge. People looking to buy a house might now get the mortgage, at a good rate, that they couldn't get even a week ago. That means more people can buy homes, and home sales and value can increase.
And a third thing that is a little more obscure, but basically adds money to the system that offers up consumer credit – car and student loans.
Three REAL things that will have a direct impact on credit for real people while we continue to obsess about bonuses that make up less than 1% of the mountain of money that we've given AIG.
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