Fed Panics
Comments(0)The Fed has granted special permission to Citigroup and Bank of America to move a whopping 30% of their capital into their mortgage divisions to prevent them from collapsing. Legally, a bank is only allowed to move 10% into one area to keep balance. My take is the fed is panicking here because if these two big dogs file chap11 in their mortgage divisions the entirety of the lending industry is going to follow suit. Get out of the capital markets before its too late people. The interest rates are still low today but they HAVE to rise in the coming quaters so the government can pay off its debt. When that happens foreclosure rates are going to sky rocket and the economy is going to get rocked hard.
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