AgentIndustry News

Bernanke blind to mortgage market trouble

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

The mortgage market is unchanged, credit available on old-fashioned agency terms and not much else. Rates are about the same, mid-sixes. For every tentative lender toe stuck back into scary water, another bather has run shrieking from the pool, or drowned. The same is true for general, nonmortgage credit: shrinking. The Fed's injections of short-term liquidity have succeeded in preventing the equivalent of a bank run, but otherwise ... zilch. The discount-window theater has been as pointless as forecast here; borrowings as of Wednesday barely hit $1 billion. High-quality borrowers have more credit than they need. The problem is credit quality, not liquidity. The world economy runs on financial innovation, not AAA antiques. The modern "structured finance" market has locked up in a loss of confidence in the value of outstandings, and inability to value new issuance. The financial world has been waiting all week for a speech this morning by Fed Chairman Ben Bernanke. He has b...