A post by Brad DeLong which I feel deserves wider attention…

……….it’s about the economy but do not let your eyes glaze over. If you do not want to be living in a cardboard reefer box or have all your offspring camping out in the garage you’d better start paying attention because things are gonna start getting stickier staring right now.

The opening quote:

Steps that can safeguard America’s economy: Neither US financial institutions nor the economy are likely to suffer from a lack of central bank liquidity provision. New lending facilities are coming along almost weekly, the safety net has been expanded to include non-bank primary dealers, the Fed has demonstrated a willingness to take on directly the most problematic parts of Bear Stearns’ balance sheet, and the Fed funds rate has been reduced by 200 basis points within 7 weeks…. [P]rocesses are in motion that may lead to new demands for more than $1,000bn in mortgages, directly or indirectly. Recent regulatory actions will enable Federal Home Loan Banks along with Fannie Mae and Freddie Mac (the government-sponsored enterprises) to purchase more than an additional $300bn in mortgage-backed securities… legislation to reduce foreclosures being pushed by Senator Christopher Dodd and Representative Barney Frank could result in the federal government purchasing or providing guarantees that enable the purchase of several hundred billion dollars worth of mortgages.’

Big damn numbers flying around here but not totally out of control. Please read the rest here and consider staying on top of this story with us and as always contacting your representatives about this. Here’s Dodd’s webpage and Barney Frank’s is here. Feel free to manipulate your ZIP codes and do whatever else you need to do to get through to these folks.

They work for us, as long as we got the vote and the bucks to fund their opponents, and they should never be allowed to forget that.


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