http://www.bloomberg.com/apps/news?pid=20601087&sid=ai_aErzotzx8&refer=home
==============

Nov. 25 (Bloomberg) -- The Federal Reserve took two new steps to unfreeze credit for homebuyers, consumers and small businesses, committing up to $800 billion.

The central bank will purchase as much as $600 billion of debt issued or backed by government-chartered housing-finance companies. It will also set up a $200 billion program to support consumer and small-business loans, the Fed said in statements today in Washington.

With today’s announcement, the central bank is starting to use some of the unorthodox policy tools that Chairman Ben S. Bernanke outlined as a Fed governor six years ago. Policy makers hope the initiatives will bring down the interest rates on mortgages and consumer loans, offsetting the withdrawal of private-sector financing.

<snipped>

There is video at link.
http://www.ft.com/cms/s/0/e7411216-bafb-11dd-bc6c-0000779fd18c.html
=========

Fed adds $800bn to boost borrowing

By Joanna Chung in Washington and Michael Mackenzie and Nicole Bullock in New York

Published: November 25 2008 14:30 | Last updated: November 26 2008 02:40

The US Federal Reserve on Tuesday escalated its efforts to revive the financial system, pledging $800bn to bolster markets for loans to homebuyers, consumers, students and small businesses.

The planned intervention in consumer lending markets had a dramatic impact on interest rates for mortgage-backed securities, which fell to their lowest levels since January after having remained stubbornly high despite Fed interest rate cuts.

However, the announcement also underscored the severity of the credit crisis and raised concerns among some analysts that the Fed might be taking too much risk – and printing too much money – in response.

“I wish there was one action that we could take, and all this would end, and the financial system would turn around ... but that is not the world we live in today,” Hank Paulson, Treasury secretary, said in discussing the measures. “We are dealing with a historic situation that happens once or twice in a 100 years.”

<snipped>

I saw the plan on the front page of the Eagle. This sort of incompetence needs to be thrown in jail. Bernanke’s thinking is that if you flood the banks with even more money, than consumers were start borrowing again and the economy will begin to recover.

The debt is imploding. People are not taking on more debt because they are losing their homes, losing their cars, losing their JOBS!!! Madness.