Despite protestations by the Federal Reserve to the contrary, many investors are starting to think that mortgage bonds could be next on the list of things the Fed will do to help the economy recover from its current funk. Bloomberg reports on what some think would be a good move:
“An RTC-type structure is interesting, and it may not be
that much of a burden on taxpayers in the long run,” said Barr
Segal, a managing director at Los Angeles-based TCW Group Inc.
who helps oversee $80 billion in fixed-income assets. The
government should purchase the mortgages and reissue “debt
that’s backed by the U.S. government and there you go, you’ve
unclogged the drain,” he said.
While the Fed has ruled such a move out for now, the institution has shown that it will do just about anything in the name of "economic stimulus."
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