[lbo-talk] forbearance

[Doug Henwood]

[This reminds me of the failed strategy to save the S&Ls in the  
1980s: keep lowering standards in the hope that everything will work  
out. It didn't, and it took $200b of federal money to make it all  
work out in the end. We're not there yet.]

NEWS ALERT
from The Wall Street Journal

March 19, 2008

Fannie and Freddie's regulator unveiled a reduction of the capital  
the firms must hold to 20% from 30% previously. Ofheo said the move  
could provide up to $200 billion in immediate liquidity to the  
troubled mortgage-backed securities market. "We believe they can play  
an even more positive role in providing the stability and liquidity  
the markets need right now," Ofheo Director James Lockhart said in a  
statement.

Treasury Secretary Paulson lauded the move. "Additional capital will  
enable the companies to help more homeowners and will strengthen the  
underlying fundamentals of the mortgage market," he said.

For more information see: http://online.wsj.com/article/ 
SB120593069669648325.html?mod=djemalertNEWS